Sharia financing products and the performance of sharia commercial banks – the evidence from Indonesia

Veni Soraya Dewi ()
Additional contact information
Veni Soraya Dewi: Universitas Muhammadiyah Magelang, Indonesia

Bank i Kredyt, 2022, vol. 53, issue 5, 497-522

Abstract: This study aims to examine whether the financing products in sharia commercial banks will affect financial performance if moderated by NPF. The analytical method used in this study is MRA based on data obtained from audited annual reports of each sharia commercial bank in Indonesia in 2014–2018. The results showed that mudarabah, musyarakah, and ijarah had a positive effect on financial performance, while murabahah had no effect. NPF as a moderating variable is proven to be able to weaken the effect of mudaraba and ijarah, strengthen murabahah, but doesn’t moderate the effect of musyarakah. The implication is that it can be used as a basis for determining policy procedures and standards for lending, especially in mudarabah and ijarah. However, in murabahah NPF is actually beneficial because the assets will be returned to the bank if the customer is unable to repay the loan during the period specified in the contract.

Keywords: sharia financing products; non-performing financing; financial performance; Islamicity Performance Indexes; sharia commercial banks (search for similar items in EconPapers)
JEL-codes: G2 G23 G29 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://bankikredyt.nbp.pl/content/2022/05/bik_05_2022_03.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbp:nbpbik:v:53:y:2022:i:5:p:497-522

Access Statistics for this article

More articles in Bank i Kredyt from Narodowy Bank Polski Contact information at EDIRC.
Bibliographic data for series maintained by Wojciech Burjanek ().