Financial Determinants of Qardhul Hasan Financing Growth: Evidence from Islamic Banks in Indonesia

Agus Saur Utomo, Novita Kusuma Maharani, Danes Quirira Octavio

Abstract


The purpose of this paper is to investigate the financial factors that determine the growth of qardhul hasan financing in the sharia banks in Indonesia. We employ financial ratios such as Capital Adequacy Ratio (CAR), Non-Performing Financing (NPF), Net Interest Margin (NIM), Operational Cost to Operational Income (BOPO), Return on Asset (ROA) and Return on Equity (ROE) to explain the growth of qardhul hasan during 2011 to 2014.  This paper utilizes the fixed effect model and the random effect model to provide empirical evidences. The empirical result demonstrates that Non-Performing Financing (NPF), Net Interest Margin (NIM), Return on Asset (ROA) and BOPO have significance relationship to the qardhul hasan financing. The finding shows that the growth of qardhul hasan financing in sharia banks is influenced by financial ratios of NIM, NPF, BOPO and ROA. This finding adds important evidence to the existing research on qardhul hasan financing in sharia banks.

Keywords


Qardhul Hasan; NPF; NIM; CAR; ROE; ROA; Sharia Banks

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DOI: https://doi.org/10.14421/grieb.2015.031-03

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Copyright (c) 2015 Agus Saur Utomo, Novita Kusuma Maharani, Danes Quirira Octavio

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Global Review of Islamic Economics and Business

ISSN: 2338-2619 (p); 2338-7920 (e)

Published by:
Faculty of Islamic Economics and Business
State Islamic University (UIN) Sunan Kalijaga

In cooperation with:
Consortium for Islamic Economics

Creative Commons License
All publications by Global Review of Islamic
Economics and Business are licensed under a 
Creative Commons Attribution-ShareAlike 4.0
International License

 

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