Determinants of non performing financing in Indonesian Islamic banks
Author
Source
Islamic Research and Training Institute
Issue
Vol. 2015, Issue 3-12 (31 Dec. 2015), pp.1-15, 15 p.
Publisher
Islamic Development Bank (IDB) Islamic Research and Training Institute (IRTI)
Publication Date
2015-12-31
Country of Publication
Saudi Arabia
No. of Pages
15
Main Subjects
Financial and Accounting Sciences
Religion
Islamic Studies
Topics
- Banks
- Islamic jurisprudence
- Econometrics
- Gross national product
- Financing
- Exchange rates
- Financial policy
- Loans
- Indonesia
- Financial intermediation
- Islamic Banks
Abstract EN
Indonesian economy depends heavily on banking sector as engine to grow.
Banking sector remains the important infrastructure for the businesses to expand their activities.
For this reason, ensuring the soundness of bank performance is an important thing to do.
Among variable in this issues is Non Performing Loan.
This variable should be maintained in such level to ensure financial intermediation works.
Failure to do so would negatively affect the Indonesian economy.
Meanwhile, the Islamic banking Industry is growing at a faster rate than conventional banking industry in this largest muslim population.
It has been established for more than thirty years to support the Indonesian economy and it is timely to look into the performance especially on the financing risk performance (Non Performing Financing).
Hence, this paper seeks the determinants of the Non Performing Financing in Islamic Bank in Indonesia.
To get the comprehensive analysis, determinants of the conventional Non Performing Loan is also taken up.
Data from January 2004 to September 2014 is adopted with variables of capital adequacy, financing rate, interest rate, Islamic financing, conventional loan, industrial production index as a proxy for GDP, price, and exchange rate.
Ranges of time series econometric techniques are utilized.
Some recommendations are, firstly, the government shall maintain economic performance to keep the NPF and NPL as low as possible.
Secondly, FDR based RR policy imposed by central bank, as regulator, to Islamic banks seems to be effective in developing real sector and it shall be adopted in the conventional banks.
American Psychological Association (APA)
Sukmana, Raditya. 2015. Determinants of non performing financing in Indonesian Islamic banks. Islamic Research and Training Institute،Vol. 2015, no. 3-12, pp.1-15.
https://search.emarefa.net/detail/BIM-668657
Modern Language Association (MLA)
Sukmana, Raditya. Determinants of non performing financing in Indonesian Islamic banks. Islamic Research and Training Institute No. 3-12 (2015), pp.1-15.
https://search.emarefa.net/detail/BIM-668657
American Medical Association (AMA)
Sukmana, Raditya. Determinants of non performing financing in Indonesian Islamic banks. Islamic Research and Training Institute. 2015. Vol. 2015, no. 3-12, pp.1-15.
https://search.emarefa.net/detail/BIM-668657
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references : p. 15
Record ID
BIM-668657