Islamic Bank Financing Behavior: A Survey in Asia
Tasya Aspiranti, Amir Shaharuddin, Ima Amaliah

Tasya Aspiranti
management Departement, Economic and Business Faculty
Universitas Islam Bandung

Amir Shaharuddin, Universiti Saint Islam Malaysia

Ima Amaliah, Economics Departement, Economic and Business Fakulty, Universitas Islam Bandung

Abstract

This paper aims to analyze how is the Islamic Banks provided financing behavior in Asia. This financing behavior is interesting to study because economic conditions do not influence it and even contribute to the stability of the financial system and the economy. Currently, Islamic Banks are still relied on to provide financing to their customers, most of whom are in the real business sector, according to Islamic principles in the halal business sector. Using a sample of Islamic Banks in 7 Asian countries, based on the 2013 - 2019 period we find that Islamic Bank financing (OC) in Asia is influenced by the capital adequacy ratio (CAR), the level of non performing financing (NPF) and economic growth (GDP). Cointegration testing through the Johansen Cointegration Test shows that in the four variables, namely OC, CAR, NPF, and GDP, there is a long-term or cointegrated relationship, so we use VECM analysis to see the effect between variables. In the long term, CAR, NPF and GDP significantly influence OC. The biggest variable contributions to OC are CAR, GDP, and NPF

Keywords: Islamic Bank, Financing,NPF

Topic: Economic Welfare in Terms of Islamic Perspective