The Efficiency of Indonesian Islamic Rural Banks: A Stochastic Frontier Analysis

Agustina, Dian; Sholihin, Mahfud; Fithria, Annisa

doi:10.18196/ijief.1212

Cited by 12 publications

(16 citation statements)

References 19 publications

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“…Those studies have examined activities, efficiency and comparison between Islamic and conventional banks. However, research into BPRS is still rarely found in the literature (Trinugroho et al , 2018; Warninda, 2014; Nashihin and Harahap, 2014; Muhari and Hosen, 2015; Agustina et al , 2019 and Jatmiko, 2017). Trinugroho et al (2018) investigated BPRS margins, competition, and diversification; but did not investigate management ownership .…”

Section: Introductionmentioning

confidence: 99%

“…However, she did not examine the ownership effect and only used time-series data. Nashihin and Harahap (2014), Muhari and Hosen (2015), and Agustina et al (2019), using the ratio of operating expenses to operating income, data envelopment analysis and stochastic frontier analysis evaluated the efficiency of BPRS. However, Nashihin and Harahap (2014) only used time-series data and Muhari and Hosen (2015) only examined six zones in Indonesia.…”

Section: Introductionmentioning

confidence: 99%

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Management ownership and the performance of Islamic microfinance institutions: a panel data analysis of Indonesian Islamic rural banks

Fithria

Sholihin

Arief

et al. 2021

IMEFM

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Purpose This study aims to analyse the relationship between management ownership and the performance of Islamic microfinance institutions (MFIs) using panel data from Indonesian Islamic rural banks (Bank Pembiayaan Rakyat Syariah [BPRS]). Design/methodology/approach This study uses unbalanced quarterly panel data from BPRS during the period from 2011 to 2016. Performance, as the dependent variable in this study, is analysed based on three sets of measures, namely, profitability, efficiency and the financing risk. Management ownership, as the independent variable in this study, is represented by ownership by the board of directors (BOD), the board of commissioners (BOC) and the sharia supervisory boards (SSB). Findings The results show that ownership by the BOD and BOC does not have a significant relationship with profitability and efficiency. However, the BOD ownership has a negative relationship with the financing risk and vice versa for the BOC ownership. Additionally, the study reveals that ownership by the SSB plays a positive and significant role in increasing the profitability and efficiency but does not have a significant impact on the financing risk. Originality/value This is one of the first studies to provide empirical results regarding the relationship between management (BOD, BOC and SSB) ownership and the performance of BPRS. The finding reveals that ownership by the SSB is very important to increase the profitability and efficiency of the BPRS. Contribution to Impact This study fills the gap in the literature about Islamic MFIs in Indonesia, especially the BPRS. This research also provides an insight into corporate governance practices and Islamic MFIs’ performance using BPRS data. The findings provide useful information for policy makers and regulators.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Management ownership and the performance of Islamic microfinance institutions: a panel data analysis of Indonesian Islamic rural banks

Fithria

Sholihin

Arief

et al. 2021

IMEFM

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“…Specifically, in Indonesia, research conducted (Agustina, Sholihin, & Fithria, 2019) aims to measure and analyze BPRS efficiency using balanced panel data from quartiles I 2011 to quartiles IV 2016. The sample includes 58 Sharia Rural Banks with a total of 1,392 observations.…”

Section: Discussionmentioning

confidence: 99%

The Relationship Between Capital Structure and Performance in Islamic Rural Bank

Wahyudi¹,

Fithria²,

Wardiwiyono³

2020

Int. J. Islam. Stud. Human

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The capital structure is important for financial institutions including Sharia Rural Bank (BPRS). However, BPRS has a problem that is the limited capital owned so that it affects performance. The main objective of this paper is to investigate the relationship capital structure and performance of the Islamic Rural Banks (BPRS) in Indonesia. The study using panel data regression to measure the capital structure on performance. The research sample used 164 BPRS that operate in 33 provinces from 2010 until 2017. The results show that capital structure affects DER (debt to equity ratio) and DAR (debt to asset ratio), but negatively affects ETA (equity to total Asset ratio). These findings indicate that there is an increase in the capital structure of the performance of the BPRS in Indonesia. Hence, bank managers must reach a trade-off between the advantages and disadvantages of creating liquidity, and consider the negative relationship between liquidity creation and bank performance when making decisions.

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“…The phenomenon of social intermediation in banking in general to date has produced various studies ranging from the relationship between social intermediation in the form of finance and economic inclusion of poor families, such as the research by Bongomin (Bongomin 2018) to social intermediation services for the survival of the microfinance unit, such as the research by Wairimu and Mwilaria (Wairimu and Mwilaria 2017b). Seeing the urgency of banking social intermediation, researchers have also begun to look at the role and function of Islamic banking as what Ibrahim and Law has done in their research (Ibrahim and Law 2019), or Agustina (Agustina 2019). Furthermore, Iqbal's research also highlights the differences between social intermediation between conventional and Islamic banks (Iqbal 2013).…”

Section: Social Intermediation In Sharia Bankingmentioning

confidence: 99%

SOCIAL INTERMEDIATION OF SHARIA BANKING FROM THE ISLAMIC LAW PERSPECTIVE: A Case Study at Bank Negara Indonesia (BNI) Syari’ah

Ipandang

Djaoe²

2022

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This research focuses on the dynamics of social intermediation implemented by BNI Syari’ah in Kendari City, South Sulawesi, Indonesia based on the Islamic law perspective and its impact on social life. In developing and realizing the social intermediation function of Islamic banks that arise from administrative-structural and cultural dimensions, the interpretation and meaning of a conceptual perspective are present. Therefore, this research applies a qualitative approach with a case study type through a one-site design. Data collection is done through in-depth interviews, participatory observation, and documentation study. The data were analyzed with the principle of on-going analysis using Miles and Huberman's analysis method. The research found that social intermediation implemented by BSK (BNI Syari’ah Kendari) really determines the potential and mentality of the poor society. This social intermediation is in the form of institutions such as the bayt al-mâl. This way, the poor can receive zakât, infâq, alms, grants, and other social funds. Furthermore, the social intermediation even has a positive impact on the community, because it integratively puts forward the concept of mas}lah}ah (according to the principles of maqâsid al-sharî‘ah).

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The Efficiency of Indonesian Islamic Rural Banks: A Stochastic Frontier Analysis

Cited by 12 publications

References 19 publications

Management ownership and the performance of Islamic microfinance institutions: a panel data analysis of Indonesian Islamic rural banks

Management ownership and the performance of Islamic microfinance institutions: a panel data analysis of Indonesian Islamic rural banks

The Relationship Between Capital Structure and Performance in Islamic Rural Bank

SOCIAL INTERMEDIATION OF SHARIA BANKING FROM THE ISLAMIC LAW PERSPECTIVE: A Case Study at Bank Negara Indonesia (BNI) Syari’ah

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