nep-isf New Economics Papers
on Islamic Finance
Issue of 2020‒01‒06
four papers chosen by

  1. Sharia Banking Dynamics and the Macroeconomic Responses: Evidence from Indonesia By Mansur, Alfan
  2. Financial Inclusion Acceleration through Islamic Social Economic Activity By Pitriyanti, Pipit
  4. Premi Penjaminan Simpanan Berbasis Risiko: Studi Kasus LPS Indonesia By Nizar, Muhammad Afdi; Mansur, Alfan

  1. By: Mansur, Alfan
    Abstract: Sharia banking industry in Indonesia has been established since early 1990s and growing remarkably after 1998. How the industry contributed to the Indonesian economy and what shocks drove the sharia banks' financing in Indonesia were investigated in this paper using a Structural Vector Auto-regression (SVAR) model with recursive short run restrictions as its identification strategy. The results showed that GDP growth, core inflation, and business activity responded to increase in sharia banks' financing positively, but with lags. Expanding sharia financing by 1 per cent boosted up GDP growth by 0.06 per cent. In the short-run, the contribution of sharia banks' financing to the macroeconomic variables was limited, but it then escalated in the long run with the main channel of transmission through its ability to drive people's purchasing power. Another result showed that sharia banks' financing had a negative relationship with the central bank's monetary policy. In order to improve the performance of sharia banking in Indonesia, the demands of domestic sharia financing have to be strengthened with regards to the large number of Moslems in Indonesia. At the same time, Islamic banks have to improve their business processes. Rather than capping their profit margins or murabahah-based financing, they should promote more profit sharing mudharabah-based financing with prioritizing principle of mutual help among Moslems.
    Keywords: Sharia banks' financing, Structural Vector Auto-regression (SVAR), macroeconomic variables, shock
    JEL: C13 C32 E51 F43 G21
    Date: 2019–02–02
  2. By: Pitriyanti, Pipit
    Abstract: Financial services are an important condition for public involvement in the economic system, but the fast growing financial industry is not necessarily accompanied by adequate access to finance. This paper states the importance of the role of inclusive finance in the success of the development of a country and how inclusive finance can be achieved by community participation in social economic activities, both individually by utilizing the local wisdom of arisan (social gathering), and organizationally in the form of CSR. Writing is done using descriptive qualitative methods. It can be concluded that arisan and CSR are Islamic social economic activities, both of which can be utilized as a strategy towards financial inclusion.
    Keywords: arisan (social gathering), CSR, Islamic social economy, financial inclusion, social marketing
    JEL: O35 O38 Z12 Z13
    Date: 2019–12
  3. By: Yogyakarta, Perpustakaan STIPRAM; Rada, Regina Yuliana
    Abstract: Yogyakarta is a historic city full of culture. Tamansari is one of the historic buildings of the Yogyakarta palace. The location of Tamansari building is in the south of Sultanate Palace of Yogyakarta. The architect of the building is a portuguese nation. The design of this water castle building is a blend of Javanese, Islamic, Chinese, European, Hindu, and Portuguese culture so that there is acculturation of culture in the building. So Tamansari is a relic of history that must be preserved as afrom of love of the homeland in the tourism sector.
    Date: 2019–07–23
  4. By: Nizar, Muhammad Afdi; Mansur, Alfan
    Abstract: This research aims to: (i) identify banking performance indicators that can potentially become the basis for risk-based deposit insurance premium in Indonesia, (ii) estimate risk-based deposit insurance rates for individual banks; and (iii) approximate the incurred costs of premium for individual banks. The results show that a number of banking performance indicators that can be used as the basis for risk-based deposit insurance premium encompass such as capital adequacy ratio (CAR), loan to deposit ratio (LDR), non-performing loans, (NPL), and cost to income ratio (CIR). CAR poses the largest weight of 48.48 per cent. Another result estimates the risk-based deposit insurance rates for individual banks ranging from 0.200 to 0.352 per cent per annum. The other result reveals that big banks do not always have a better risk management compared to small banks. Also, banks with a good risk management, indicated by low scores in this research, will burden the same premium costs either based on risk-based scheme or the current flat rate scheme.
    Keywords: flat rate, deposit insurer, premium, banking restructuring, banks’ risk, risk-based
    JEL: C12 C54 G21 G28 G30
    Date: 2019–12–20

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