Analysis Of Determinants Of Consumptive Financing Of Sharia Commercial Banks In Indonesia

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Analysis of Determinants of Consumptive Financing of Sharia Commercial Banks in Indonesia

Introduction

Consumptive financing, particularly those using the Murabahah contract, has emerged as a superior product of Sharia Commercial Banks (BUS) in Indonesia. This study aims to investigate the factors that influence the growth of Murabaha consumptive financing on Indonesian buses. Understanding the determinants of consumptive financing is crucial for BUS, the Financial Services Authority (OJK), and the government to formulate effective strategies to increase the growth of consumptive financing in the Indonesian Islamic banking sector.

Methodology

This study employed secondary data from the Financial Services Authority (OJK) and the Central Statistics Agency (BPS) during the 2015-2019 period. The research sample consisted of 10 buses registered in OJK. The data analysis technique used was the regression of panel data with hypothesis testing using T-Statistics (for partial testing) and F-Statistics (for simultaneous testing) at a significance level of 5%.

The Role of Wadi'ah Savings

Wadi'ah savings is a form of deposit that serves as the main source of funds for buses to channel financing. The higher the amount of wadi'ah savings, the greater the bus's ability to provide consumptive financing. Increasing wadi'ah savings can be interpreted as public trust in the increasingly higher buses, thus encouraging them to leave funds at Islamic banks. This is a crucial factor in the growth of consumptive financing, as it provides the necessary funds for buses to channel financing to customers.

The Importance of Wadi'ah Savings

Wadi'ah savings is a key component of the Islamic banking system, as it provides a source of funds for buses to channel financing. The higher the amount of wadi'ah savings, the greater the bus's ability to provide consumptive financing. This is because wadi'ah savings are used as a source of funds for buses to channel financing to customers. Therefore, increasing wadi'ah savings can be achieved by increasing customer confidence through transparency and good fund management. Building interesting programs to increase the number of customers and encourage the growth of wadi'ah savings is also an effective strategy.

Effect of Gross Domestic Product (GDP)

GDP reflects the economic level of a country. The higher the GDP growth, the higher the purchasing power of the people. This condition will encourage an increase in demand for products and services, including consumptive financing. Along with economic growth, people tend to be bolder to conduct credit transactions, including for the purchase of consumptive goods. Therefore, GDP is a crucial factor in the growth of consumptive financing, as it reflects the economic level of a country and influences the demand for consumptive financing.

The Impact of GDP on Consumptive Financing

GDP is a key determinant of consumptive financing, as it reflects the economic level of a country and influences the demand for consumptive financing. The higher the GDP growth, the higher the purchasing power of the people, which will encourage an increase in demand for products and services, including consumptive financing. Therefore, increasing GDP growth can be achieved by implementing policies that support sustainable economic growth, such as investing in infrastructure and human capital.

Role of Profit Sharing

Profit sharing is one of the main principles in Islamic banking. Larger profit sharing in Islamic banks will attract customers to leave funds and use their products. The benefits derived from profit sharing can then be used to channel consumptive financing, which in turn will encourage the growth of consumptive financing on the bus. Therefore, profit sharing is a crucial factor in the growth of consumptive financing, as it attracts customers to leave funds and use their products.

The Importance of Profit Sharing

Profit sharing is a key component of the Islamic banking system, as it attracts customers to leave funds and use their products. The benefits derived from profit sharing can then be used to channel consumptive financing, which in turn will encourage the growth of consumptive financing on the bus. Therefore, increasing profit sharing can be achieved by implementing policies that support the development of the Islamic banking sector, such as providing incentives for buses that channel consumptive financing to the community.

Implications

The results of this study have several implications:

  • For Bus: Increasing Wadi'ah Savings can be achieved by increasing customer confidence through transparency and good fund management. Building interesting programs to increase the number of customers and encourage the growth of wadi'ah savings is also an effective strategy.
  • For OJK: OJK needs to encourage sustainable economic growth in order to increase people's purchasing power and ultimately increase demand for consumptive financing.
  • For the Government: The government can issue policies that support the development of the Islamic banking sector, including by providing incentives for buses that channel consumptive financing to the community.

Conclusion

This study proves that Wadi'ah savings, gross domestic product, and profit sharing have positive and significant influence on Murabaha consumptive financing on Indonesian buses. The results of this study can be taken into consideration for buses, OJK, and the government in formulating strategies to increase consumptive financing growth in the Indonesian Islamic banking sector.
Frequently Asked Questions (FAQs) on Analysis of Determinants of Consumptive Financing of Sharia Commercial Banks in Indonesia

Q: What is consumptive financing, and how does it relate to Sharia Commercial Banks (BUS) in Indonesia?

A: Consumptive financing refers to the provision of financing for the purchase of consumable goods and services. In the context of Sharia Commercial Banks (BUS) in Indonesia, consumptive financing is a key product offered by these banks, particularly through the use of the Murabahah contract.

Q: What are the determinants of consumptive financing in Indonesia?

A: The determinants of consumptive financing in Indonesia include Wadi'ah savings, Gross Domestic Product (GDP), and profit sharing. These factors have been identified as having a positive and significant influence on the growth of Murabaha consumptive financing on Indonesian buses.

Q: What is Wadi'ah savings, and how does it relate to consumptive financing?

A: Wadi'ah savings is a form of deposit that serves as the main source of funds for buses to channel financing. The higher the amount of wadi'ah savings, the greater the bus's ability to provide consumptive financing. Increasing wadi'ah savings can be achieved by increasing customer confidence through transparency and good fund management.

Q: How does GDP affect consumptive financing in Indonesia?

A: GDP reflects the economic level of a country. The higher the GDP growth, the higher the purchasing power of the people, which will encourage an increase in demand for products and services, including consumptive financing. Therefore, increasing GDP growth can be achieved by implementing policies that support sustainable economic growth.

Q: What is the role of profit sharing in consumptive financing?

A: Profit sharing is one of the main principles in Islamic banking. Larger profit sharing in Islamic banks will attract customers to leave funds and use their products. The benefits derived from profit sharing can then be used to channel consumptive financing, which in turn will encourage the growth of consumptive financing on the bus.

Q: What are the implications of this study for buses, OJK, and the government?

A: The results of this study have several implications:

  • For Bus: Increasing Wadi'ah Savings can be achieved by increasing customer confidence through transparency and good fund management. Building interesting programs to increase the number of customers and encourage the growth of wadi'ah savings is also an effective strategy.
  • For OJK: OJK needs to encourage sustainable economic growth in order to increase people's purchasing power and ultimately increase demand for consumptive financing.
  • For the Government: The government can issue policies that support the development of the Islamic banking sector, including by providing incentives for buses that channel consumptive financing to the community.

Q: What are the limitations of this study?

A: This study has several limitations, including:

  • The use of secondary data, which may not be comprehensive or up-to-date.
  • The limited sample size, which may not be representative of the entire population of buses in Indonesia.
  • The assumption that the determinants of consumptive financing are constant over time, which may not be the case in reality.

Q: What are the future research directions for this study?

A: Future research directions for this study include:

  • Investigating the impact of other determinants of consumptive financing, such as interest rates and inflation.
  • Examining the effect of consumptive financing on the overall economy of Indonesia.
  • Developing a more comprehensive model of consumptive financing that takes into account the interactions between different factors.

Q: What are the practical implications of this study for policymakers and practitioners?

A: The results of this study have several practical implications for policymakers and practitioners, including:

  • The need to increase Wadi'ah savings through transparency and good fund management.
  • The importance of encouraging sustainable economic growth to increase demand for consumptive financing.
  • The need to issue policies that support the development of the Islamic banking sector, including by providing incentives for buses that channel consumptive financing to the community.