Many profitable Muslim-owned SMEs in Indonesia remain overlooked by institutional capital due to structural and religious mismatches, however, a new wave of Shariah aligned dealmakers is stepping in to bridge the divide and unlock untapped potential.
One such effort is led by Jakarta-based Halla Solusi Investama (HSI) Co-Founder Devin Halim Wijaya, who recently formalized the investment matching firm after years of informal activity in the space. The focus is clear: identify, structure and support Shariah compliant investment into Muslim-owned or Islamic-aligned SMEs across Indonesia.
“There are companies making over IDR10 billion (US$625,000) per year, entirely bootstrapped,” says Devin. “But they’re considered too ‘informal’ for banks and too ‘niche’ for VCs. That’s the gap we’re trying to fill.”
The firm’s approach is hands-on and execution-focused. Rather than acting as a fund, HSI operates as a transaction adviser, earning success based fees once deals close. It connects vetted SMEs with credible Shariah compliant capital from a growing pool of Islamic P2P lenders, securities crowdfunding platforms and VC firms.
And the traction is real. The firm is currently finalizing an IDR100 billion(US$6.3 million) funding deal for a fast-moving consumer goods client, backed by a VC investor. Several smaller mandates are also progressing through due diligence including transactions ranging from IDR500 million (US$30,000) to IDR40 billion (US$2.5 million)for Halal cosmetics brands, modest fashion businesses and food producers.
The firm has already helped several clients secure growth capital from aligned investors, some through equity, others through Islamic crowdfunding or Murabahah contracts.
Muslim-owned SMEs dominate Indonesia’s retail, food, modest fashion and consumer services sectors. However, many operate without external financing, largely due to structural and cultural barriers: interest-based loans violate Islamic principles, while equity investors are scarce and often unprepared to deal with religious sensitivities in governance and operations.
For institutions seeking Halal exposure, the Islamic SME segment represents an untapped but highly fragmented market. Unlike fintech or infrastructure – where structured Islamic investment has taken root – consumer-driven SMEs rarely enter formal Islamic finance pipelines. This paradox is not due to weak fundamentals, but rather a mismatch in language, expectations and the deal format.
The team behind HSI saw this disconnect firsthand through both academic and professional lenses. Devin, who holds a business degree from Imam Mohammed bin Saud Islamic University’s Jakarta branch, studied Islamic jurisprudence alongside corporate finance. His experience in Islamic crowdfunding and institutional banking made one thing clear – there is supply and there is demand, but both rarely speak the same language.
Rather than operating as a fund, the firm acts as a matchmaker – vetting SMEs, preparing them for investment and connecting them with Shariah compliant capital. Clients range from Halal cosmetics companies to modest fashion brands, many of which operate profitably but lack the structure or networks to attract institutional money.
The model is lean. The firm earns success-based fees once deals close and, in some cases, places fractional investor relations officers inside portfolio businesses to support transparency and post-deal communication. All contracts are reviewed for Shariah compliance, leveraging certifications held by the co-founders and external advisers.
The firm doesn’t deploy its own capital; Indonesia’s market has too many transparency and fraud issues for that. Instead, it acts as a filter and structuring partner between founders and verified capital sources.
The firm relies heavily on referrals through personal networks, Islamic banks, P2P lenders and crowdfunding platforms, rather than open applications or cold outreach. Founder character and operational integrity weigh just as heavily as financials during due diligence.
One challenge is the perception among investors that Shariah compliant SMEs represent low-yield or constrained opportunities. However, Devin argues the opposite.
“Institutions are slowly realizing that naturally Halal sectors, like personal care, F&B and modest fashion, often outperform, especially during downturns. They are recession-resilient and deeply connected to consumer identity.”
Indeed, the firm’s earliest clients include a cosmetics company with historical revenues in the US$6-7 million range and projected growth up to US$20 million. Deals are typically structured using Musharakah, Murabahah, or hybrid models, depending on asset type and investor appetite.
Though current deal sizes range from IDR500 million (US$30,000) to IDR5 billion (US$310,000), the firm aspires to support ticket sizes up to US$100 million in collaboration with institutional investors. However, the Indonesian market still presents few eligible targets in that range outside of government-linked projects.
Despite growing retail adoption of Islamic finance, evidenced by the popularity of Shariah P2P lending and Sukuk savings products, institutional investment in Shariah compliant PE and VC remains limited in Indonesia.
Hasan VC (a unit of the Adaro Group) is one of the few explicitly Islamic VCs in the market. Many others invest in Halal sectors but avoid Islamic branding due to the fear of narrowing their investor or consumer base.
This misalignment means that many truly Shariah compliant investments such as infrastructure, energy and manufacturing, go unrecognized. HSI sees part of its role as reframing what qualifies as Halal investing in an Indonesian context.
The market perception is still narrow. But Halal doesn’t mean small. The firm is helping to demonstrate that Islamic-aligned businesses can be both ethical and high-growth.
The team’s long-term ambition is to create an Islamic investment fund grounded in the SME segment, a fund that blends profit, impact and faith. However, that vision remains several years down the road. For now, the focus is on building a credible track record, expanding their investor base and raising awareness of overlooked Shariah compliant sectors.
