The Impact Of Financing Product Scheme To Islamic Banking Financial Performance

Fadilla Muhammad Mahdi; Fitrian Aprilianto

doi:10.29040/jiei.v9i3.10766

Authors

Fadilla Muhammad Mahdi Universitas Muhammadiyah Malang, Indonesia
Fitrian Aprilianto Universitas Muhammadiyah Malang, Indonesia

DOI:

https://doi.org/10.29040/jiei.v9i3.10766

Keywords:

financing scheme, Islamic bank, financing proportion, Return on Assets, Non-performing Financing

Abstract

The aim of this study is to determine how different financing plans affect a bank's ability to earn income and manage financing risk throughout the course of both the short- and long-terms. The study utilizes an associative research design and a quantitative methodology. The Financial Services Authority's monthly aggregate reports on Islamic banking for the years 2012 to 2022 make up the study sample. Total debt-based financing, total profit-sharing financing, total leasing-based financing, return on assets (ROA), and non-performing finance (NPF) are among the variables included in the study model. Vector Error Correction Modelling (VECM), which enables the study of the data, is used to examine the short- and long-term effects of independent factors on the dependent variable. Two investigational modelsâ€”the ROA model and the NPF modelâ€”are included in the study. According to the research's findings, when viewed from the NPF model's point of view, debt- and leasing-based financing are more secure over the long run for Islamic banks. Leasing-based financing, however, turns out to be more beneficial for Islamic banks from the standpoint of the ROA model

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