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Role of Financial Inclusion to Stability: The Case of Indonesia’s Sharia Banking

Author

Listed:
  • Widarwati Estu

    (STIE Sutaatmadja, Otista 76 Subang)

  • Sari Pindykurnia

    (STIE Sutaatmadja, Otista 76 Subang)

  • Nurmalasari Nunik

    (STIE Sutaatmadja, Otista 76 Subang)

Abstract

Public access to the services of financial institutions determines the revenues amount of financial institutions. The growth of bank account helps banks to manage the financing service that provides for the community. This study examines the relationship of financial inclusion and financial stability, especially in Indonesia’s Sharia banking. Financial inclusion defined as community access to financial services which peroxided by deposits, while the financial stability of Sharia banking is measured by Non Performing Financial (NPF). Samples include financial data of 5 sharia banks during the study period from 2011 to 2016 were analyzed using classical assumption test and regression test. The results of study found that the deposits as proxy of financial inclusion had a positive effect to stability of financial.

Suggested Citation

  • Widarwati Estu & Sari Pindykurnia & Nurmalasari Nunik, 2019. "Role of Financial Inclusion to Stability: The Case of Indonesia’s Sharia Banking," HOLISTICA – Journal of Business and Public Administration, Sciendo, vol. 10(1), pages 7-15, April.
    • Handle: RePEc:vrs:hjobpa:v:10:y:2019:i:1:p:7-15:n:1
    DOI: 10.2478/hjbpa-2019-0001
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    References listed on IDEAS

    as
    1. Alfred Hannig & Stefan Jansen, 2010. "Financial Inclusion and Financial Stability : Current Policy Issues," Finance Working Papers 23124, East Asian Bureau of Economic Research.
    2. Khawla Bourkhis & Mahmoud Sami Nabi, 2013. "Islamic and conventional banks' soundness during the 2007–2008 financial crisis," Review of Financial Economics, John Wiley & Sons, vol. 22(2), pages 68-77, April.
    3. repec:pra:mprapa:48339 is not listed on IDEAS
    4. Hannig, Alfred & Jansen, Stefan, 2010. "Financial Inclusion and Financial Stability: Current Policy Issues," ADBI Working Papers 259, Asian Development Bank Institute.
    5. Mohieldin , Mahmoud & Rostom , Ahmed & Fu, Xiaochen & Iqbal, Zamir, 2012. "The Role of Islamic Finance in Enhancing Financial Inclusion in Organization of Islamic Cooperation (OIC) Countries," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 20, pages 55-120.
    6. Han, Rui & Melecky, Martin, 2013. "Financial Inclusion for Stability: Access to Bank Deposits and the Deposit Growth during the Global Financial Crisis," MPRA Paper 45157, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Financial inclusion; Financial Stability; Sharia Banking;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General

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