Bridging Trust and Practice: Sharia Financial Literacy Among Migrant Worker Families in East Java

Abstract

Remittances from Indonesian migrant workers (PMI) play a crucial role in sustaining household welfare and contributing to national development. However, the developmental impact of remittances depends largely on how families allocate and manage them, which is influenced by financial literacy. This study examines the financial literacy of PMI families in Ngantru, Tulungagung, East Java, with a focus on sharia financial literacy and its implications for remittance use and the Sustainable Development Goals (SDGs). Using a qualitative descriptive approach, data were collected through in-depth interviews, Participatory Rural Appraisal (PRA), and document reviews involving 15 PMI households. Findings reveal that while PMI families demonstrate strong trust in Islamic finance and consistently prioritize education with remittance funds, their financial knowledge and practical skills remain limited. The majority of remittances are directed toward consumption and education, with only a small portion allocated for savings or productive investment. This indicates a cognitive-behavioral gap: positive attitudes toward saving and sharia compliance are not matched by financial behaviors. These practices contribute to SDG 1 (No Poverty) and SDG 4 (Quality Education), but have weaker impacts on SDG 8 (Decent Work and Economic Growth) due to limited entrepreneurial investment. The study underscores the importance of enhancing sharia financial literacy, strengthening outreach of Islamic financial institutions, and designing remittance-linked financial products tailored to migrant families. Policymakers, financial institutions, and community organizations must collaborate to ensure that remittances serve not only immediate household needs but also long-term empowerment and sustainable development.