Proceedings of the 1st International Conference on Economics and Business, ICEB 2023, 2-3 August 2023, Padang, Sumatera Barat, Indonesia

Research Article

Are Islamic Banks More Smes Friendly Than Their Conventional Counterparts? Evidence From Indonesian Industry Level Data

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  • @INPROCEEDINGS{10.4108/eai.2-8-2023.2340986,
        author={Dyah Titis  Kusuma Wardani and Akhmad  Akbar Susamto and Danes  Quirira Octavio},
        title={Are Islamic Banks More Smes Friendly Than Their Conventional Counterparts? Evidence From Indonesian Industry Level Data},
        proceedings={Proceedings of the 1st International Conference on Economics and Business, ICEB 2023, 2-3 August 2023, Padang, Sumatera Barat, Indonesia},
        publisher={EAI},
        proceedings_a={ICEB},
        year={2024},
        month={6},
        keywords={financing islamic banking conventional banking small and medium enterprises (smes)},
        doi={10.4108/eai.2-8-2023.2340986}
    }
    
  • Dyah Titis Kusuma Wardani
    Akhmad Akbar Susamto
    Danes Quirira Octavio
    Year: 2024
    Are Islamic Banks More Smes Friendly Than Their Conventional Counterparts? Evidence From Indonesian Industry Level Data
    ICEB
    EAI
    DOI: 10.4108/eai.2-8-2023.2340986
Dyah Titis Kusuma Wardani1,*, Akhmad Akbar Susamto1, Danes Quirira Octavio2
  • 1: Universitas Muhammadiyah Yogyakarta, Yogyakarta, Indonesia
  • 2: Universitas Diponegoro, Semarang, Indonesia
*Contact email: dyah.wardani@umy.ac.id

Abstract

This research compares Islamic and conventional banks' support for SMEs. This study uses panel regression estimates for SMEs financing growth and percentage of overall financing in Islamic and conventional banking. Otoritas Jasa Keuangan, OJK's website provides SMEs financing data. The same source provides bank numbers, total assets, capital adequacy ratios, and FDR or LDR for each banking system. Real GDP growth, percent change in CPI, and government domestic debt growth are collected from Statistics Indonesia (BPS) and Bank Indonesia, respectively. Islamic banks are not friendlier to SMEs, according to the results. Islamic financing must fit into the global SME finance agenda. G20 Investment and Infrastructure Working Group (IIWG) and Global Partnership on Financial Inclusion (GPFI) priority reform measures may help introduce Islamic financial products.