Green Fintech And Household Investment: A Comparative Study Of Indonesia And Malaysia Through The Lens Of Islamic Finance

Abstract

The climate finance gap in emerging markets underscores the urgency of mobilizing capital for low-carbon transitions. While institutional investors dominate global green finance markets, households remain underrepresented, particularly in Southeast Asia. Financial technology (fintech) platforms present opportunities to democratize access to green investment products by reducing transaction costs, improving transparency, and embedding behavioral nudges. This research investigates whether green fintech mobilizes household capital in Indonesia and Malaysia, two leading Islamic finance jurisdictions with growing green sukuk markets and rapid digital financial adoption. Drawing on household finance theory, behavioral economics, and Islamic finance ethics, the study develops a conceptual model linking fintech features (green labels, impact dashboards, zakat/waqf integration) to household investment flows, moderated by Shariah compliance and market volatility. Using a comparative mixed-methods design, we propose an econometric framework combining platform microdata, fund performance, and investor surveys. The quantitative strategy includes difference-in-differences (DiD), survival analysis of retention, and panel vector autoregression (VAR) to examine feedback between retail flows and green sukuk issuance. The paper hypothesizes that fintech design features significantly increase retail flows, Shariah compliance enhances participation, and impact dashboards strengthen retention during volatility. The expected contributions are threefold: (1) empirical evidence on household participation in green finance via fintech in emerging Muslim-majority contexts; (2) theoretical integration of identity utility and maqāṣid al-sharīʿah into fintech adoption; and (3) actionable policy recommendations for regulators, fintech platforms, and Islamic financial institutions.