Financing Risk in Indonesian Islamic Rural Banks: Do Financing Products Matter?*

• 발행기관: 한국유통과학회
• 저자명: Agus WIDARJONO M.B. Hendrie ANTO Faaza FAKHRUNNAS
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 7 No.9, 305~314쪽, 전체 10쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2020.09.30

영문 초록

This paper investigates the impact of profit and loss sharing (PLS) contracts on non-performing financing of Islamic rural banks as Islamic small banks focus on small and medium enterprises at province level across country. Our study employs panel data, consisting of 142 Islamic rural banks and using quarterly data from 2013Q1 to 2018Q4, and splits them based on the bank’s size and geographical area. Both static and dynamic panel regressions are then applied. The results obviously indicate that a high proportion of profit and loss sharing contracts leads to high financing risk. The large Islamic banks encounter a higher non-performing financing stemming from profit and loss contracts compared to small Islamic banks. Profit and loss contracts also produce higher financing risk for Islamic banks outside Java, as those areas are less developed areas than Java itself. A more efficient Islamic bank is less financing risk. Income diversification lessens the impaired financing and, more particularly, large Islamic banks and Islamic banks located in Java much benefit by diversifying income and financing to lower financing risk. Our study suggests that Islamic rural banks may consider the optimal level of profit and loss sharing contracts to minimize financing risk.

목차

1. Introduction

2. Literature Review

3. Research Method and Materials

4. Results and Discussion

5. Conclusions

References

키워드

Non-Performing Financing Profit and Loss Sharing Financing Islamic Rural Bank Indonesia