Understanding and Selecting Sharia or Conventional Financing Among Small Entrepreneurs, in Pasuruan Regency Devout of Islamic Culture (Phenomenology Studies)

Purpose: Knowing the understanding and interest of small-scale business actors about Islamic finance in Pasuruan Regency, which is culturally devout Design/Methodology/Approach: Phenomenology method is used to find the meaning andnatureoftheexperienceofsmallentrepreneurswhenusingIslamicorconventional financing, as well as how the small entrepreneur responds to Islamic financing. Findings: The results of this study indicate that the Satrya Emas program has not been understood by most informants and has notyet specifically synergized with Islamic financial institutions.Most of the informants did not understand various sharia financing contracts and products,in addition,they did not own the right understanding on whether or not bank interest is halal and haram due to their lack of knowledge and information. Financial institutions were chosen because some informants believed the Al-Quran and Hadist laterally. Other reasons are understanding that bank interest is halal paid, haram when consumed. Moreover, there was a facility of jemput bola, meaning that banks initiate to approach clients to provide loan, and also the ease, flexibility and kinship in dealing with bad debt. It is not a priority for most informants to utilize sharia or conventional financing. Almost all informants did not own good and correct financial records, so they assessed the progress of their business in accordance with their respective perceptions. Special supports from the PasuruanRegency government are required, and the collaboration of various parties, among government, religious leaders, educational institutions, Islamic financial institutions, and non-governmental organizations. Thus, theyall jointly synergize to promote sharia financing in the area of Pasuruan Regency Originality/value:This research collaborates the study of the experiences of small-scale entre preneurs as subjects,financeinstitutions,religious teachers and the government, so that the results of this study can be are ference for regulators and local governments to make policies capable of accommodating different understanding groups so that Islamic finance is able to ground in areas that have a devout Islamic culture.