Catalyzing Muslim women-owned Halal SMEs: Aligning models of Islamic financial institutions and governmental involvement

This study investigates Muslim women-owned small and medium-sized enterprises (SMEs) in Indonesia by developing an integrated model that incorporates financial risk tolerance, management control systems, and institutional support. Employing partial least squares structural equation modeling on a sample of 212 Muslim women-owned Halal SMEs, the research identifies the key determinants of economic performance. The findings demonstrate that financial risk tolerance significantly influences both management control systems and overall performance. In contrast, institutional support from Islamic financial institutions and government agencies does not directly affect business performance. Instead, their effects are fully mediated through financial risk tolerance and management control systems, which act as critical mechanisms translating external support into sustainable performance outcomes. This study thus highlights the pivotal role of internal capabilities in leveraging institutional resources.