Rieke Meinar Widyasari, Muhamad Said Fathurrohman

Internal Bank Factors and Financing Distribution: Evidence from Islamic Commercial Banks

Introduction

Internal bank factors and financing distribution: evidence from islamic commercial banks. Study internal factors (BOPO, CAR, NOM, DPK) affecting financing distribution in Islamic commercial banks (2014-2024). BOPO, CAR, NOM negatively impact, DPK positively. Focus on efficiency.

Abstract

This study aims to analyze the effect of BOPO, CAR, NOM, and DPK on the distribution of financing in Islamic commercial banks in 2014: Q1 - 2024: Q3. The method used in this research is quantitative research method with panel regression analysis technique. The sampling technique used purposive sampling and obtained 10 Islamic banks as samples. By using data sources from quarterly financial reports on each bank's website and publications on the OJK website. Partial research results in this study indicate that BOPO, CAR, and NOM have a significant and negative influence on financing distribution. Meanwhile, DPK has a significant and positive influence on the distribution of financing. The implication of this research is that Islamic banking should optimize operational efficiency, productive asset management, and liquidity management, and that regulators should determine and evaluate related policies to encourage financing distribution.

Review

This study tackles a highly relevant and timely topic concerning the operational dynamics and financial distribution mechanisms within Islamic commercial banks. By investigating the influence of key internal bank factors—BOPO (operational efficiency), CAR (capital adequacy), NOM (net operating margin), and DPK (third-party funds)—on financing distribution over a significant period from 2014: Q1 to 2024: Q3, the research aims to provide valuable insights into the sector's performance. The adopted quantitative research methodology, utilizing panel regression analysis on a purposive sample of 10 Islamic banks, appears appropriate for identifying relationships between these variables, drawing data from credible sources like bank financial reports and OJK publications. This systematic approach suggests a robust attempt to dissect the complex interplay of internal efficiency, capital adequacy, profitability, and liquidity on banks' primary function of financing. The abstract clearly delineates the core findings, revealing differentiated impacts of the chosen internal factors. Specifically, BOPO, CAR, and NOM are identified as having a significant and negative influence on financing distribution, suggesting that higher operational costs, capital buffers, or profitability ratios might constrain the flow of funds to clients. Conversely, DPK exhibits a significant and positive effect, underscoring its critical role as a primary source of funds for financing activities. These results offer actionable implications, urging Islamic banks to strategically optimize operational efficiency, enhance productive asset management, and improve liquidity management. The call for regulators to evaluate and adjust related policies further highlights the practical significance of this research for the overall stability and growth of the Islamic banking sector. While the study presents valuable insights, the abstract also prompts some considerations for the full paper. The sample size of 10 Islamic banks, though covering a substantial time frame, might be relatively modest for broader generalizability across diverse Islamic banking markets, especially considering the potential heterogeneity within the sector. It would be beneficial for the full paper to elaborate on the theoretical underpinnings explaining *why* certain factors, such as CAR and NOM, exhibit a negative relationship with financing distribution, as this might not be immediately intuitive without further context. Additionally, exploring the interplay with external macroeconomic factors, competitive landscape, or specific Sharia-compliance frameworks could provide a more holistic understanding of financing distribution dynamics. Future research could expand the sample size, include comparative analysis with conventional banks, or delve into the moderating effects of regulatory environments to enrich these findings further.

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