Determinants of non-performing financing in Indonesian Islamic banks: A regional and sectoral analysis

Fakhrunnas, Faaza; Astuti, Riska Dwi; Anto, M. B. Hendrie

doi:10.21511/bbs.17(4).2022.07

Cited by 6 publications

(2 citation statements)

References 28 publications

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“…Determinants of credit sources of banks and, in particular, understanding the factors of non-per-forming financing are also important for improving the level of innovative development, taking into account general financing, inflation, the COVID-19 pandemic, and regional aspects (Fakhrunnas et al, 2022).…”

Section: Shkarupa Et Al (2022) Determined the Dependence Of Economic ...mentioning

confidence: 99%

Financial and investment indicators for accelerating innovation development: Comparison of GII leaders and Ukraine

Dobrovolska,

Sonntag,

Kachula

et al. 2023

Investment Management and Financial Innovations

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The purpose of the paper is to determine the causal relationship between financial and investment indicators and the level of innovation development in GII leading countries and Ukraine. For a sample of 10 leaders in GII-2022 and Ukraine for 2011–2020, a correlation analysis was conducted based on the following indicators: the value of GII, foreign direct investment (net inflows), domestic credit to the private sector, ease of getting credit, protecting minority investors, and real interest rate. A positive relationship (with moderate/high strength) between innovation development and foreign direct investment has been proven in 7 out of 11 countries with a time lag of 0-2 years; domestic credit to the private sector – in 6 countries (lag of 0-3 years); and protecting minority investors – in 9 countries (lag of 0-2 years). For other indicators, the relationship is negative. Through VAR-modelling and Granger test, it is proven that the change in the value of foreign direct investment causes the change in the value of GII in 6 countries (bidirectional causality exists only in Ukraine); domestic credit to the private sector – in 6 countries, protecting minority investors and real interest rate – in 2 countries, and ease of getting credit – only in Switzerland. The results show that foreign direct investment and domestic credit to the private sector are the reasons for increasing the level of innovation development and have potentially the highest influence. In Ukraine, compared to GII leaders, only the factor of foreign direct investment is identified as a cause of innovation development.

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Section: Shkarupa Et Al (2022) Determined the Dependence Of Economic ...mentioning

confidence: 99%

Financial and investment indicators for accelerating innovation development: Comparison of GII leaders and Ukraine

Dobrovolska,

Sonntag,

Kachula

et al. 2023

Investment Management and Financial Innovations

View full text Add to dashboard Cite

show abstract

“…Globally, an Islamic bank's NPF ratio is typically given a maximum threshold of 5% (Amuakwa-Mensah et al, 2017). If an Islamic bank's NPF ratio exceeds this indicator, the bank may potentially face the suspension of its financing activities, and in extreme cases, liquidation may be considered (Fakhrunnas et al, 2022). The calculation of this ratio is as follows: 𝑁𝑃𝐹 = 𝐹𝑖𝑛𝑎𝑛𝑐𝑖𝑛𝑔 𝐶𝑜𝑙.…”

Section: Non-performing Financingmentioning

confidence: 99%

The Impact Of Financing Product Scheme To Islamic Banking Financial Performance

Mahdi,

Aprilianto

2023

JIEI

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The aim of this study is to determine how different financing plans affect a bank's ability to earn income and manage financing risk throughout the course of both the short- and long-terms. The study utilizes an associative research design and a quantitative methodology. The Financial Services Authority's monthly aggregate reports on Islamic banking for the years 2012 to 2022 make up the study sample. Total debt-based financing, total profit-sharing financing, total leasing-based financing, return on assets (ROA), and non-performing finance (NPF) are among the variables included in the study model. Vector Error Correction Modelling (VECM), which enables the study of the data, is used to examine the short- and long-term effects of independent factors on the dependent variable. Two investigational models—the ROA model and the NPF model—are included in the study. According to the research's findings, when viewed from the NPF model's point of view, debt- and leasing-based financing are more secure over the long run for Islamic banks. Leasing-based financing, however, turns out to be more beneficial for Islamic banks from the standpoint of the ROA model

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The effect of industry sector and profit-loss sharing financing on credit risk of Islamic banks in Indonesia considering COVID-19 pandemic

Wicaksono,

Wulandari,

Hendranastiti

2024

JIABR

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Purpose The COVID-19 pandemic has affected economic activity both globally and nationally, which also has an impact to banking sector and Islamic banking is no exception. This study aims to see how the impact of Islamic bank financing in seven sectors affected by the COVID-19 to the credit risk of Indonesian Islamic banks. In addition, this study also tries to see whether the proportion of mudharabah-musharaka or profit-loss sharing (PLS) financing also affects credit risk in Indonesian Islamic banks. Design/methodology/approach This study uses fixed effect panel data regression over the period 2011–2020. Findings The results of this study show that wholesale and retail trade financing will increase credit risk in Indonesian Islamic banks as a policy implication. In terms of the proportion of PLS financing, it shows that a larger share of PLS financing will reduce credit risk in Islamic banks. Originality/value This paper demonstrates that despite the industry’s perception of PLS as riskier than murabaha-based instruments. According to the research, PLS financing will lower credit risk in Islamic banks. This study found that PLS contributes to overall economic stability by shifting the function of Islamic banks from a simple lending body to an active market catalyst/manager/consultant to market players seeking financial aid.

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Determinants of non-performing financing in Indonesian Islamic banks: A regional and sectoral analysis

Cited by 6 publications

References 28 publications

Financial and investment indicators for accelerating innovation development: Comparison of GII leaders and Ukraine

Financial and investment indicators for accelerating innovation development: Comparison of GII leaders and Ukraine

The Impact Of Financing Product Scheme To Islamic Banking Financial Performance

The effect of industry sector and profit-loss sharing financing on credit risk of Islamic banks in Indonesia considering COVID-19 pandemic

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