Analysis of Effect of Profitability, Capital, Risk Financing, the Sharia Supervisory Board and Capabilities Zakat in Islamic Perspective with Circular Approach Causastion on Islamic Banks in Indonesia

Abstract

This study aimed to analyze the effect of profitability, capital, financing risks, the ability of Sharia supervisory boards and zakat from an Islamic perspective in the circular causation approach, on Sharia banks in Indonesia. This study used a methodology to integrate the TSR of interaction, integration, and evolustion (IIE) to produce factors that affect the ability of zakat and the factors that affect the profitability of Indonesian Islamic banks. The study used the purposive sampling method with a sample of five Islamic banks from 2014 until 2017. This study uses Two Stage Least Square (2SLS) analysis to solve the problem with the Eviews program. The results demonstrated that the ability of zakat can be influenced by profitability, risk financing and capital while the Sharia supervisory board does not have a significant effect on the zakat capability. Profitability may be affected by the ability of zakat, risk financing and capital but not the Sharia supervisory board. The implications show that there is a simultaneous relationship between the ability of zakat and profitability. We recommend that Islamic banks that adhere to Islamic principles should not be afraid to issue zakat as the tithe does not diminish but increases wealth.Contribution/Originality: This study used Two Stage Least Square (2SLS) analysis to solve the problem with the Eviews program. This study created a new formula for the interaction, integration and evolution (IIE) process resulting from the Tawhidi String Relation (TSR) calculation. This study found no reciprocal relationship between zakat capability and profitability. This paper contributes to the first logical analysis that the traffic zakat Islamic banks can be influenced by profitability, the risks of financing and the Sharia supervisory board. Profitability may be affected by the ability of zakat, risk financing, and Sharia supervisory board. Capital has no effect on the ability of zakat and profitability. The results show that Islamic banks should adhere to Islamic principles and not be afraid to issue zakat as the tithe does not diminish but increases wealth.

The Effect of Profitability, Company and Board of Commissioners’ Size on Zakat Expenditure in Islamic Bank

“…It can be said that ROA increases, it will cause a greater level of profit achieved by the bank and that if the bank's financial performance is good, the charitable funds spent will be greater. The results of this study are consistent with research conducted by Yusnita, et al [6] the ability of zakat can be influenced by ROA, and there is a simultaneous relationship between the ability of zakat and ROA. This study also supports the results of previous studies by Herwanti et al [7] and Muhammad [8] who used ROA as one of the independent variables explained that ROA has a positive and significant effect on the amount of zakat paid by Islamic banks.…”

“…Until now, the management of zakat is still dominated by individual zakat [1], so the company zakat is very potential the authority to give advice and influence the directors in making decisions on payment of zakat in the corporate environment [5]. Some studies related to this research are research conducted by Yusnita et al, [6] Herwanti [7], and Muhammad [8], the results of which states that profitability has a significant effect on zakat both simultaneously and partially. In contrast to research conducted by Samad et al [9], Utari & Ninglasari [10], and Afandi [11], which stated that the profitability variable of Islamic banks does not always have an effect on corporate zakat spending by Islamic banks.…”

Analisis Pengaruh Kinerja Keuangan terhadap Pengeluaran Dana Zakat Perusahaan pada Bank Umum Syariah

“…Menurut Hermuningsih & Susminingsih (2017) menunjukkan bahwa rasio solvabilitas yang diukur menggunakan CAR mempunyai pengaruh pada pengeluaran zakat. Sedangkan menurut Akbar & Hendrawati (2020) dan Yusnita et al (2019) dalam penelitiannya menunjukkan CAR tidak berpengaruh pada pengeluaran zakat pada BUS. Penelitian yang dilakukan oleh Utami (2018) FDR berpengaruh negatif signifikan terhadap kepatuhan zakat dan NPF berpengaruh negatif dan tidak signifikan terhadap kepatuhan zakat BUS.…”

“…Sementara, Wahyudi (2015) menunjukkan FDR berpengaruh terhadap zakat namun variabel NPF tidak berpengaruh signifikan terhadap zakat. Akan tetapi, dalam penelitian Yusnita et al (2019) variabel NPF berpengaruh pada pengeluaran zakat pada BUS.…”

“…hal tersebut didukung oleh penelitian (Wahyudi, 2015), (Romadhani & Wahyudi, 2015), Murni et al (2018). Akan tetapi penelitian ini pun tidak sesuai dengan Yusnita (2019) dan Khasanah et al, (2019) menjelaskan NPF mempunyai pangaruh pada zakat.…”