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The Contribution of Islamic Banks towards the Achievement of Sustainable Development Goals: The Case of Indonesia

Author

Listed:
  • Nunung Ghoniyah

    (Lecturer, Faculty of Economics, Universitas Islam Sultan Agung, Semarang, Indonesia)

  • Sri Hartono

    (Lecturer, Faculty of Economics, Universitas Islam Sultan Agung, Semarang, Indonesia)

Abstract

This study aims to strengthen the opinion that the main goal of Islamic banks is not to obtain profit, but rather to improve the standards of living. In this study, the evidence is obtained by processing secondary data on Islamic banks in Indonesia during the period of 2011 to 2017 by using panel data regression model. The results of the data analysis support the hypothesis that banks whose goals are aimed at falah will demand lower payment obligations from customers, allowing the customers to manage funds in the real sector. The implication is also strengthened by good financial quality control, namely low non-performing financing value. Another form of support provided by Islamic banks, namely a more equitable cooperation contract, can also reflect falah in every policy of Islamic banks.\

Suggested Citation

  • Nunung Ghoniyah & Sri Hartono, 2019. "The Contribution of Islamic Banks towards the Achievement of Sustainable Development Goals: The Case of Indonesia," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 65, pages 93-110, Desember.
    • Handle: RePEc:lpe:efijnl:201907
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    More about this item

    Keywords

    sustainable development goals; economic development; syirkah financing; profitability;
    All these keywords.

    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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