Does the COVID-19 pandemic affect financing of Islamic banks in Indonesia?

F. Achsani, Muhammad Nur Faaiz and Kassim, Salina and Haron, Razali (2025) Does the COVID-19 pandemic affect financing of Islamic banks in Indonesia? MALIA: Jurnal Ekonomi Islam, 16 (2). pp. 327-347. ISSN 2087-9636 E-ISSN 2549-2578

PDF - Published Version Restricted to Registered users only Download (680kB) | Request a copy

Abstract

Introduction: This study investigates the influence of macroeconomic and bank-specific variables on financing activities in Indonesian Islamic banks, particularly during the COVID-19 pandemic, to assess the sector's financial resilience and alignment with sustainable finance principles. Methods: This research employs a quantitative approach using dynamic panel data analysis covering the period from 2011 to 2023, with variables including Gross Domestic Product, inflation, interest rates, non-performing financing, bank size, profitability, and a pandemic indicator. Results: The findings reveal that while the COVID-19 pandemic did not significantly affect financing, interest rates and bank size had a significant positive impact. Other variables such as GDP, inflation, non-performing financing, and profitability did not exhibit statistically significant effects. The resilience observed in Islamic banks is attributed to their reliance on ethical principles, risk-sharing mechanisms, and asset-backed financing structures. Conclusion and suggestion: The study concludes that Indonesian Islamic banks-maintained stability during the pandemic, reinforcing their role in promoting long-term financial sustainability and economic resilience. Policymakers and regulators are encouraged to support the Islamic banking sector as a key component of sustainable finance frameworks, leveraging its unique characteristics to contribute to broader development goals

Item Type:	Article (Journal)
Uncontrolled Keywords:	Financing, Indonesia, Islamic Bank, Pandemic
Subjects:	H Social Sciences > HG Finance > HG3368 Islamic Banking and Finance
Kulliyyahs/Centres/Divisions/Institutes (Can select more than one option. Press CONTROL button):	Institute of Islamic Banking & Finance (IIiBF)
Depositing User:	Dr. Razali Haron
Date Deposited:	26 Dec 2025 16:01
Last Modified:	26 Dec 2025 16:01
Queue Number:	2025-12-Q1072
URI:	http://irep.iium.edu.my/id/eprint/126065

Actions (login required)

View Item