Research Article
Factors Affecting Non-Performing Financing (NPF): Case Study of Indonesia and Pakistan 2014-2023
@INPROCEEDINGS{10.4108/eai.3-10-2024.2358768, author={Nurul Hikmah and Nanda R. Nurdianto and Eka Puspitawati}, title={Factors Affecting Non-Performing Financing (NPF): Case Study of Indonesia and Pakistan 2014-2023}, proceedings={Proceedings of the 3rd International Conference on Contemporary Risk Studies, ICONIC-RS 2024, 3 October 2024, Surakarta, Indonesia}, publisher={EAI}, proceedings_a={ICONIC-RS}, year={2025}, month={9}, keywords={npf islamic bank ardl indonesia pakistan}, doi={10.4108/eai.3-10-2024.2358768} }- Nurul Hikmah
Nanda R. Nurdianto
Eka Puspitawati
Year: 2025
Factors Affecting Non-Performing Financing (NPF): Case Study of Indonesia and Pakistan 2014-2023
ICONIC-RS
EAI
DOI: 10.4108/eai.3-10-2024.2358768
Abstract
Indonesia and Pakistan are the countries with the largest Muslim population in the world with increasing Islamic bank customers every year, but they have different NPF fluctuations. This study purpose to compare the factors affecting NPF using the ARDL method. The results show that, in the long run inflation and interest rates have a positive impact on NPF in Indonesia, while GDP and exchange rates have a negative effect. In Pakistan, interest rates and exchange rates have a positive impact on NPF, while GDP and inflation have a negative effect. Islamic banks in Indonesia should be more selective in providing financing during periods of declining GDP, high inflation, high interest rates, and Rupiah appreciation. Conversely, Islamic banks in Pakistan should increase financing when GDP increases, inflation and interest rates are low, and the Rupee depreciates.
