MACROECONOMIC DETERMINANTS OF BANK FINANCING STABILITY: A COMPARATIVE STUDY OF SHARIA AND NON-SHARIA BANKS

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Published: Jun 9, 2025
DOI: https://doi.org/10.19109/ifinance.v11i1.27465
Keywords:
Bank Financing Stability, Macroeconomic, Non Sharia Banks, Sharia Banks

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Hanif Ahmadi
Universitas Islam Sultan Agung
Pungky Lela Saputri
Universitas Islam Sultan Agung

Abstract

This research analyzes the stability of Sharia banks in responding to economic shocks compared to non-Sharia banks by examining the influence of macroeconomic variables on their financing performance. The population in this study includes all Sharia and non-Sharia banks operating in Indonesia registered with the Otoritas Jasa Keuangan (OJK). The sample consists of all population from both types of banks, this research used secondary data obtained from publications by Bank Indonesia, OJK, and BPS. The data used monthly data from july 2018 until august 2023. This research employs the Vector Error Correction Model (VECM), which is a refinement of the Vector Autoregression (VAR) model, used when the variables exhibit long-term cointegration this analysis is used to see factors that can influence financing for both Sharia and non-sharia banks. Three independent variables were tested (interest rates, inflation and exchange rates). The responses of Sharia banks and non-sharia banks to shocks in economic variables will be compared. VECM is used because it is more comprehensive and allows us to see short-term and long-term effects. This research found that sharia financing in the long term is influenced by the exchange rate in a negative direction, while in the short term interest rates have a negative effect. On the other hand, for non-sharia financing, inflation has a positive effect in both the short and long term, the exchange rate has a negative effect in the long term, and interest rates have a negative effect in the short term. These findings highlight structural differences in how each banking system responds to macroeconomic fluctuations. These conclusions emphasize that Sharia banks may offer greater stability under certain economic conditions, particularly in managing inflation-related risks, although both systems remain vulnerable to exchange rate movements and interest rate fluctuations in the short term.

Article Details

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MACROECONOMIC DETERMINANTS OF BANK FINANCING STABILITY: A COMPARATIVE STUDY OF SHARIA AND NON-SHARIA BANKS. (2025). I-Finance: A Research Journal on Islamic Finance, 11(1), 51-65. https://doi.org/10.19109/ifinance.v11i1.27465
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Vol. 11 No. 1 (2025): I-FINANCE: a Research Journal on Islamic Finance
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I-Finance by http://jurnal.radenfatah.ac.id/index.php/I-Finance is lincensed under a Creative Commons Attribution-ShareAlike 4.0 International Lisence.

How to Cite

MACROECONOMIC DETERMINANTS OF BANK FINANCING STABILITY: A COMPARATIVE STUDY OF SHARIA AND NON-SHARIA BANKS. (2025). I-Finance: A Research Journal on Islamic Finance, 11(1), 51-65. https://doi.org/10.19109/ifinance.v11i1.27465

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