ABSTRACT
Women’s financial inclusion and entrepreneurial aspirations are central to achieving sustainable and balanced economic development. Therefore, in this study we examine how knowledge (KN), subjective norms (SN), attitude (ATT), perceived complexity (PC), and relative advantage (RA) influence the adoption of Islamic microfinance (AIM) through mediating factor social system norms (SSN). Using the structural equation model (SEM) via SmartPLS, we evaluated eleven hypotheses, with primary data collected from 384 female entrepreneurs. Using innovation diffusion theory (IDT) and theory of planned behavior (TPB), the study finds that KN, SN, and RA significantly and directly affect the social system norms. In addition, KN, SN, RA, and SSN substantially contribute to AIM. The effect of KN and SN on AIM is substantial and is mediated through SSN. By screening how social construction significantly influences women’s microfinance borrowing behavior, we add to the standing body of literature on Islamic finance. It delivers practical insights for policymakers and microfinance organizations on how to raise consciousness, implement policies that improve social acceptance, and disseminate information to improve women’s access to Islamic microfinance.