Acceleration of Islamic Bank Financing in Indonesian Agriculture Sector

Mubarok, Faizul

doi:10.22515/shirkah.v6i2.341

Cited by 5 publications

(4 citation statements)

References 48 publications

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“…Islamic banking financing is used to support the real sector through profit loss sharing cooperation agreements (Mubarok, 2021;Supriani et al, 2021). Financing with the sharia principle will increase the productivity of the community so as to enhance the real outputs (Bananuka, et al, 2020;Meslier et al, 2020).…”

Section: H2: Iimm Has a Significant Effect On Inflationmentioning

confidence: 99%

Effectiveness of Islamic Monetary Policy Transmission on Inflation and Economic Performance

Bawono

Laksana

Nabila

et al. 2021

Shirkah

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The most crucial part for the economic development of a country is maintaining the stability of inflation to create a positive climate for economic and business activities. A number of efforts can be performed to achieve stable inflation and increase economic growth by designing monetary policy incorporating the variables of Bank Indonesia Sharia Certificate (SBIS), Islamic Interbank Money Market (IIMM), and Financing. Drawing on this issue, the in-hand study aims to examine the effectiveness of Islamic monetary policy transmission, using the instruments of SBIS, IIMM, and Financing, on inflation and economic performance (GDP) from the period of January 2011 to December 2020. Using secondary data, this study employs VAR/VECM approach by the assistance of Eviews program. The results reveal that in the short term period, inflation is significantly influenced by the IIMM, while GDP t is affected by the GDP t-1 and financing activities. In the long term period, both inflation and GDP are determined by SBIS and financing activities. In general, this study results in a conclusion that the variables of IIMM, financing activities, and GDP t-1 influence the economic performance both in short and long term periods. These results contribute as fruitful insights to developing financial strategies and monetary policy to maintain stable inflation and improve economic performance of a country.

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Section: H2: Iimm Has a Significant Effect On Inflationmentioning

confidence: 99%

Effectiveness of Islamic Monetary Policy Transmission on Inflation and Economic Performance

Bawono

Laksana

Nabila

et al. 2021

Shirkah

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“…Inflation erodes the value of money, causing an increase of prices (Mubarok, 2021). In high inflationary regime conditions, farmers have to spend more to meet their needs on farmland (Wibowo, 2019) and may also have an influence on their business so Islamic bank agricultural financing could also get a negative impact from inflation.…”

Section: Hypotheses Developmentmentioning

confidence: 99%

Agricultural financing risk and ib agricultural financing: A long relationship

Alan Nur,

Honesty Nur Firdaus,

Armanto

et al. 2023

JIFA

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Indonesia is destined to be an agrarian country because of its location on the equator, unfortunately not all farmers are able to access capital for their agricultural businesses while the contribution of the agricultural sector to employment is very high. It is also important to consider that Indonesia is also a country with the largest Muslim population in the world, so there should be a financing scheme in the agricultural sector that is in accordance with sharia compliance. Therefore, Islamic banking should be present to provide capital to farmers who need agricultural financing without violating sharia provisions. Identifying variables that affect Islamic bank financing in the agricultural sector in the long run is the aim of this study so that our findings can be one of the considerations for policy makers for future policies. To reveal the purpose of our research, we consider the factors affecting the agricultural financing of Islamic banks which consist of the risk of agricultural financing, farmer welfare, inflation and economic growth with observations for a decade from 2012 to 2021 on a quarterly basis. By using ARDL estimation, our findings find that in the long run relationship the welfare of farmers has no effect, while the other remaining variables have a significant effect. This study offers valuable implications indicating that the presence of Islamic banking can be considered as a viable financial solution within the agricultural sector.

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“…Okafor (2020) shows that credit to agricultural sector, government spending on agricultural sector, commercial bank credit and agricultural credit guarantee scheme fund have positive and significant effects on agricultural output while interest rate has negative and insignificant effect on agricultural output. However, interest rates mostly influenced the level of diversity in Islamic commercial bank financing in the agriculture sector (Mubarok, 2021). Islamic banks have contributed to financial inclusion in such a way that customers that refrain from taking credit due to interest on the basis of their religion have the option of getting loans too.…”

Section: Empirical Findings Of the Analysis Of The Impact Of Formal A...mentioning

confidence: 99%

Impact of agricultural financing on agricultural output: the role of commercial banks

Abubakar

Muhammad

2023

JGSS

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The study investigates the impact of agricultural financing by commercial banks on agricultural output in Nigeria. Agricultural sector contribution to GDP was used to define agricultural output, while the agricultural financing was defined by commercial bank credit to the agricultural sector. The study employed real interest rate and inflation rate as control variables. The time span under study was 40 years which dated from 1981-2020 using annual secondary data, Data on agricultural output and commercial bank agricultural financing, were obtained from the Nigerian central bank annual statistical bulletin(CBN) whereas interest rate and inflation rate were obtained from united nation conference on trade and development (UNCTAD). The Autoregressive Distribution Lag (ARDL) was adopted due to its efficiency, robustness and dynamic nature in time series analysis. It was discovered the explanatory variables under study only have a long run relationship with the explained variable. Specifically, commercial bank agricultural financing rate has a positive and substantial impact on agricultural output whereas real interest rate and inflation rate have a negative and insignificant relationship with agricultural output in the long run. The study recommends that reliable sources of agricultural financing should be developed and policies aimed at boosting allocation of credit to agricultural sector should be created and implemented correctly so as to increase agricultural output.

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Acceleration of Islamic Bank Financing in Indonesian Agriculture Sector

Cited by 5 publications

References 48 publications

Effectiveness of Islamic Monetary Policy Transmission on Inflation and Economic Performance

Effectiveness of Islamic Monetary Policy Transmission on Inflation and Economic Performance

Agricultural financing risk and ib agricultural financing: A long relationship

Impact of agricultural financing on agricultural output: the role of commercial banks

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