Acceleration and Strengthening of Sharia Financial Inclusion Through Merging Sharia Banking in Indonesia

Abstract

Islamic banking in Indonesia is slowly experiencing significant developments both in terms of number of assets and its financial performance. On the other hand, the market share was only able to grow by 6.18 percent with grow rate less than 5 percent. Therefore, one of the strategies to increase and accelerate the growth of Islamic banking is through a merger. The purpose of this study is to provide an overview of the potential development of Islamic banking after the merger as an effort to strengthen the inclusion and acceleration of Islamic finance in Indonesia. The method used is in the form of a systematic analysis review by collecting various secondary data and then conducting a quality assessment to obtain in-depth research objectives. The results found through content analysis indicate that the merger strategy provided added value to the banking industry through greater market expansion, increased cost efficiency, financial performance, and lowering prices, to meet the public need for sharia-based financial services. Through a merger strategy, Islamic banking is able to become a new pillar of national economic strength and encourage Indonesia to become the center of the world on Islamic finance.

Islamic Banking in Indonesia: Elaboration of 8 Research Path based on Scopus Database

“…This statement also strengthens the opinion of Goeltom (2009) which states that the expansion of Islamic banking also contributes to the growth of the real sector, because Islamic financing is closely related to the development of the real sector. The growth of Islamic banking also causes increased competition in the financial sector, because local banks seek to increase the scale of their assets through mergers and acquisitions, so that this increasingly fierce competition has an impact on the quality of banking services getting better and the range of Islamic banking products wider (Syarifuddin et al, 2022). Apart from that, the development of Islamic banking in Indonesia is a manifestation of a society that really needs a financial system, especially Islamic banking products and services that are healthy and meet sharia standards.…”

“…Thus, it can be concluded that the stimulus of Islamic banks continues to have a positive influence on the development of the national economy, which is also accompanied by improvements in the quality of products and services (Syarifuddin et al, 2021).…”