The Impact of Financing in Islamic Banking on Indonesian Economic Growth (original) (raw)

The Development of Real Sectors in Indonesia: Significant Role of Conventional and Islamic Banking

This paper mainly focused in comparing the role of conventional and Islamic banking on the development of real sectors in Indonesia. This study also included the analysis for economic sector growth. The Growth Regression Cross Sectional was used as quantitative analysis to capture the significant effect of both conventional and Islamic banking credit on the development of economic sector in different provinces in Indonesia. This research captured the lending activity of Islamic banks and conventional banks in 9 provinces with the highest Islamic banking activities from 2007 until 2010. Although overall Islamic bank financing activity did not affect output in province samples significantly, based on economic sector analysis Islamic banks had a major role in the development of agricultural, transportation, and services sectors. Lending activity from Islamic banking statistically affect the increase of output in those sectors, with the confidence level of 95%. The increase of Rp. 1 billion lending value from Islamic banks will give impact as follows: 1) an increase in agricultural sector output of Rp. 10.5

The Growth of Islamic Banking in Indonesia

Jurnal Ekonomika Bisnis, 2013

This article describes the growth of Islamic banking industry in Indonesia. Islamic banking to perform progressive and strong performance from the banking indicators. Bank Indonesia estimates that the Islamic banking industry will achieve a growth higher than the national banking system in general. In the development of Islamic banking there are still some challenges to be solved especially for a small market share, lack of human resources, and the lack of product development.

Role of Islamic Banking and Sectoral Economic Growth in Indonesia

2011

Services Islamic financial institution not only intended for business people Muslims only, but all businesses without referencing and preferences on the primordialism. It should be studied more depth about how the application of the principles of Islamic banking in microfinance. Islamic banking has advantages for entry in the micro sector who had only managed by interest based bank. Indonesia's bank policy on widening network of Islamic banking services, significantly affect increase in work of Islamic banking. Islamic Banking will be very instrumental in reducing poverty, but must be with innovations in service and operasionalize to positive effect on economic growth

ISLAMIC BANKS AND LOCAL DEVELOPMENT IN INDONESIA

GLOBAL CONFERENCE ON BUSINESS AND SOCIAL SCIENCES 2014, 2014

This paper was aimed to explain the development of Islamic banks and their contributions in Indonesia local development. In doing so, the paper described data on essential financial data of Islamic bank in 8 provinces in Indonesia mainly in their economic growth, percentage of population living under poverty line, along with Islamic financial indicators, i.e. asset, third parties fund, and financing. The results indicate that Islamic banks accomplish impressive financial performance reflected in fast growing in asset, third parties fund, and financing. In term of financial intermediaries, Islamic bank also perform well as presented in larger share of financing compared to third parties fund. Islamic banks are also resilient to local short-run shocks in economy. However, relation between these financial indicators with economic indicators is not likely very supportive mainly because Islamic bank’s limited market share and issue in financial inclusion in Indonesia.

The Role of Islamic Banking in the Development of Economic Sectors in Indonesia

International Journal of Applied Business Research

Islamic bank can play a role in improving the welfare of the community. Through the intermediary function, Islamic banks raise funds deposits and channel financing for productive purposes. The purpose of this study is to examine the role of Islamic bank financing to increase economic productivity and job creation. This study uses simultaneous panel estimation technique with Two Stage Least Square (TSLS) method, using secondary data from 2005-2016. The results of this study reveal that the financing of Islamic banks play a role in increasing economic activity and employment, the role of Islamic banks finance large from the role of conventional bank credit, although the contribution is not too large. Regression result per sector of economy indicates that financing of syariah bank give positive role to increase economic activity in each. The role of financing for job creation by economic sector shows different results. Most Shariah banking financing in the economic sector (7 sectors) p...

The Importance and Expansion of the Islamic Bank Sector

International Conference on Eurasian Economies 2021, 2021

Islamic Finance grows in international finance across the globe. The aim of this study is to introduce the importance and specificities of the rapidly expanding Islamic banking system worldwide, as well as its expansion process. After a summary of the economic principles of the Islamic banking systems, with special emphasis on the principle of profit and risk sharing, - which essentially distinguishes Islamic and traditional interest-based banking systems - special highlight will be on the countercyclical feature of Islamic banks, which is also a fundamental difference from the procyclical feature of the traditional banking systems. The spread of the Islamic banking system is investigated, also stated, that the growth of it can be only partly explained by the expansion of the Muslim population. It can be stated, the Islamic banking system will become a decisive factor that will gain more portion of the financial market, mostly in some specific regions, but also worldwide – especiall...