Research Article
Internal Factors Affecting Islamic Banking Financing for Micro, Small, and Medium Enterprises
@INPROCEEDINGS{10.4108/eai.21-10-2019.2294428, author={Rusdi Hidayat Nugroho and Sonja Andarini and Franky Nasution and Nurul Aqidatul Izzah}, title={Internal Factors Affecting Islamic Banking Financing for Micro, Small, and Medium Enterprises}, proceedings={Proceedings of the 4th International Conference on Indonesian Social and Political Enquiries, ICISPE 2019, 21-22 October 2019, Semarang, Central Java, Indonesia}, publisher={EAI}, proceedings_a={ICISPE}, year={2020}, month={4}, keywords={islamic banking internal factors msme financing panel data regression fem}, doi={10.4108/eai.21-10-2019.2294428} }- Rusdi Hidayat Nugroho
Sonja Andarini
Franky Nasution
Nurul Aqidatul Izzah
Year: 2020
Internal Factors Affecting Islamic Banking Financing for Micro, Small, and Medium Enterprises
ICISPE
EAI
DOI: 10.4108/eai.21-10-2019.2294428
Abstract
The Islamic banking is one alternative in overcoming the phenomenon of a country's economic inequality. This is seen from its intermediation function as a channel for funds for Micro, Small and Medium Enterprises (MSME) for the sake of economic stability. This study aims to analyze the internal factors that influence Islamic banking financing for MSME in Indonesia. This type of research is quantitative research with secondary data. The cross-section data includes the Islamic Banking data in Indonesia, while the time series data covers the data from the first quarter of 2014 to the fourth quarter of 2018. Furthermore, the data were analyzed using panel data regression with the Fixed Effect Model (FEM). Based on the results of the analysis, it shows that the Capital Adequacy Ratio (CAR) and Non-Performing Financing (NPF) factors has a positive and significant effect on MSME financing. While Operational Costs Operating Income (BOPO) and Financing to Deposit Ratio (FDR) has a negative and significant effect on MSME financing. Then the CAR, BOPO, NPF and FDR factors influence simultaneously and significantly towards MSME financing. Thus, this research can be used in strategic policy planning for related parties to develop MSME in Indonesia.