Effects of Islamic Bank Financing on Quality of Life in the Era SDGs An Empirical Analysis on Java Islands, Indonesia
Muhammad Anif Afandi
Student at Master of Islamic Economics and Finance, Study Program of Islamic and Middle East Studies, School of Strategic and Global Studies, Universitas Indonesia, Salemba Raya Street Number 4, Central Jakarta, Indonesia
afandianif[at]gmail.com
Abstract
Islamic economic principles, well-being, is in accordance with Sustainable Development Goals (SDGs) program which is not only concerning on commercial aspects but also social aspects. Islamic banking as one of the parts of Islamic economic should carry out its operational activities based on that principle. Then, this paper aims to examine the effects of Islamic bank financing on quality of life measured by Human Development Index (HDI) in the provinces on Java Islands, Indonesia. To examine of that then used panel data regression using random effects model. The results showed that Islamic bank financing consisting by working capital, investment and consumption provide non-significant effects on HDI. However, dummy SDGs provides significant effects on HDI or in other word SDGs program starting on 2015 can trigger improving quality of life as big as 0.029 point. In addition, each independent variable can explain their dependent variable as big as 70.9 percent and the remaining is 29.1 percent influenced other variables outside the model.
Keywords: Islamic Bank Financing, HDI, SDGs, REM, Java Islands
Topic: Islamic Finance and Banking