The business cycle as a moderator of financing for financing risk of Islamic commercial banks in Indonesia

Fahmi, Much. Maftuhul, Wahyuni, Nanik and Putra, Yuniarti Hidayah Suyoso (2023) The business cycle as a moderator of financing for financing risk of Islamic commercial banks in Indonesia. Jurnal Ekonomi Syariah Teori dan Terapan, 10 (1). pp. 27-40. ISSN 2407-1935

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Abstract

Islamic banking is undoubtedly faced with several potential financing risks, with the three largest financing contracts (Mudharaba, Musharaka, and Murabaha) that reduce the financial performance of Islamic banks. The potential risk is strengthened if the stability of national economic growth is contracted. Therefore, this research aims to investigate the impact of Mudharaba, Musharaka, and Murabaha financing on Financing Risk moderated by the business cycle and the relationship between Financing Risk and the Financial Performance of Islamic Commercial Banks. The sample of this study was 12 Islamic Commercial Banks in Indonesia during the period 2017-2021. The Data were then analyzed using the technique of Moderated Regression Analysis (MRA). Researchers found that Musharaka financing has a significant positive effect on Financing Risk, Mudharaba and Murabaha Financing has an insignificant effect on Financing Risk, and Financing Risk has a significant negative effect on Financial Performance. The Business Cycle does not moderate the Financing of Mudharaba, Musharakah, and Murabaha on Financing Risk. The results can encourage the Islamic Commercial Bank to evaluate the distribution strategy of Musharaka financing, optimize the distribution of Mudharaba and Murabaha financing, and prepare financing strategies that do not depend on macroeconomic conditions.

Item Type: Journal Article
Keywords: Financing Risk; Financing; Business Cycle; Financial Performance
Subjects: 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1502 Banking, Finance and Investment > 150201 Finance
15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1502 Banking, Finance and Investment
Divisions: Faculty of Economics > Department of Accounting
Depositing User: Nanik Wahyuni
Date Deposited: 14 Apr 2023 14:53

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