THE IMPACT OF ISLAMIC FINANCIAL LITERACY UPON ORGANIZATIONAL PERFORMANCE: A MEDIATION AND MODERATION MECHANISM

Abstract

The purpose of this research is to analyze how the level of Islamic financial knowledge affects organizational performance outcomes over intermediary of financial inclusion, with regard to the moderating effects of government policies. In today's evolving financial landscape, Islamic financial literacy is vital for providing a basis for informed decision-making, fostering ethical financial practices, and improving overall organizational efficiency. Thus, organizations with the inclusive understanding of Islamic finance practices, like profit-and-loss sharing, prohibition of interest (Riba), and risk-sharing mechanisms, are likely to achieve higher performance than those without such an understanding. The financial inclusion serves as an intermediary mechanism through which Islamic finance literacy enhances access to the financial services, improves resource allocation efficiency, and increases organizational efficiency. Governments play important role in moderating the extent to which Islamic finance literacy yields positive performance outcomes. This research improves upon current body of knowledge about Islamic finance and the performance of organizations by providing a clearer explanation of how knowledge, financial accessibility & policy will together drive performance.