Main Article Content


Previous literature discussed financing's impact on performance without separating the financing model.
This study uses the consumptive financing data of Islamic commercial banks, inflation rate, and population as independent variables, and the GRDP of 33 provinces in Indonesia as the dependent variable.
The study used Indonesia and Malaysia banks for its pioneering efforts in establishing Islamic banking in Southeast Asia. The study collects data from five Indonesian and four Malaysian Islamic banks, with an observation period of 2011–2020. The data analysis used in this study was the Generalized Method of Moment (GMM).
The results of this study explain that the consumptive financing of Islamic commercial banks has a negative insignificant effect on GRDP in Indonesia, the inflation rate has a negative insignificant effect on GRDP in Indonesia, and the population has a positive and significant impact on GRDP in Indonesia. Consumptive credit in conventional banks and consumptive financing in Islamic banks account for more than 45% of total financing.
The Indonesian Financial Services Authority should adopt policies to maintain the growth of Islamic Bank productive financing, that is, working capital and investment financing, because Islamic bank consumptive financing has a negative effect on GRDP in Indonesia
This study has a unique feature compared with previous studies that use consumptive financing at Islamic banks with inflation and population variables to analyze the contribution of the local economy to gross regional domestic product.


consumptive credit consumptive financing gross regional domestic product Indonesia Islamic bank

Article Details


  1. Abid, L., Dorra, Z., & Sonia, Z. G. (2012). Household indebtedness in Tunisia. E3 Journal of Business Management and Economics., 3(10), 341–350.

  2. Ahmad, K. (1979). Economic development in an Islamic framework. Islamic Foundation.

  3. Alatan, T. S. D. (2015). Pengaruh pemberian kredit terhadap ekonomi regional Jawa Timur [The effect of granting credit to the regional economy of East Java]. Finesta, 3(1), 63–67.

  4. Alawode, A., Aziz, A. H. A., & Aviles, A. M. (2018, February 15). Sustainable Development Goals and the role of Islamic finance. World Bank Blogs.

  5. Andayani, K. & Miftahuddin. (2018). Economic base determination and influence of several variables against contributions percentage of the GDRP in Aceh Besar district. IOP Conference Series: Materials Science and Engineering, 352, 012053.

  6. Angbazo, L. (1997). Commercial bank net interest margins, default risk, interest-rate risk, and off-balance sheet banking. Journal of Banking & Finance, 21(1), 55–87.

  7. Antoni, Aimon, H., Nasfi, Ramadonna, Y., & Subhan, M. (2019). The effect of internal and external factors on bank investment credit’s demands. Jurnal Ekonomi Malaysia, 53(2), 1–12.

  8. Araminta, D. V., Qudziyah, Q., & Timur, Y. P. (2022). The role of green sukuk in realizing the Sustainable Development Goals 2030 agenda. Jurnal Ekonomi Dan Bisnis Islam, 8(2), 251–266.

  9. Ascarya, A., Suharto, U., & Husman, J. A. (2022). Proposed model of integrated Islamic commercial and social finance for Islamic bank in Indonesia. Eurasian Economic Review, 12(1), 115–138.

  10. Askari, H., Iqbal, Z., Krichene, N., & Mirakhor, A. (2014). Understanding development in an islamic framework. Islamic Economic Studies, 22(1), 1–36.

  11. Badan Pusat Statistik. (2021). Produk domestik regional bruto provinsi-provinsi di Indonesia menurut pengeluaran, 2016-2020 [Gross regional domestic product of Indonesian provinces by expenditure, 2016-2020]. Badan Pusat Statistik.

  12. Bahadir, B., & Valev, N. (2015). Financial development convergence. Journal of Banking & Finance, 56, 61–71.

  13. Beck, R., Georgiadis, G., & Straub, R. (2014). The finance and growth nexus revisited. Economics Letters, 124(3), 382–385.

  14. Beck, T., Büyükkarabacak, B., Rioja, F. K., & Valev, N. T. (2012). Who gets the credit? And does it matter? Household vs. firm lending across countries. The B.E. Journal of Macroeconomics, 12(1).

  15. Bomberger, W. A., & Makinen, G. E. (1983). The Hungarian hyperinflation and stabilization of 1945-1946. Journal of Political Economy, 91(5), 801–824.

  16. Caporale, G. M., & Helmi, M. H. (2018). Islamic banking, credit, and economic growth: Some empirical evidence. International Journal of Finance & Economics, 23(4), 456–477.

  17. Chapra, M. U. (1993). Islam and economic development: A strategy for development with justice and stability. International Institute of Islamic Thought and Islamic Research Institute.

  18. Charpe, M., & Flaschel, P. (2013). Workers’ debt, default and the diversity of financial fragilities. Structural Change and Economic Dynamics, 27, 48–65.

  19. Cottrell, A., & Lucchetti, R. (2023). Gretl (Version 2023a).

  20. Cuestas, J. C., Gil-Alana, L. A., & Malmierca, M. (2023). Credit-to-GDP ratios – Non-linear trends and persistence: Evidence from 44 OECD economies. Journal of Economic Studies, 50(3), 448–463.

  21. Damayanti, D. R. (2022). Analysis of the influence of FDI, PMDN, exports and inflation on North Sumatra’s GRDP in 2001-2020. Asian Journal of Applied Business and Management, 1(2), 53–68.

  22. De Gregorio, J. (2012). Commodity prices, monetary policy, and inflation. IMF Economic Review, 60(4), 600–633.

  23. Debelle, G. (2004). Household debt and the macroeconomy [BIS Quarterly Review]. Bank for International Settlements.

  24. Edwards, F. R., & Mishkin, F. S. (1995). The decline of traditional banking: Implications for financial stability and regulatory policy. Economic Policy Review, 1(2), 27–47.

  25. Faria, J. R., & Carneiro, F. G. (2001). Does high inflation affect growth in the long and short run? Journal of Applied Economics, 4(1), 89–105.

  26. Fariana, A., Saripudin, S., Rukmana, O., & Al. (2023). Religious humanism synergy to develop creative industry-based halal tourism in Indonesia. Al-Iqtishad Journal of Islamic Economics, 14(2), 381–398.

  27. Fatmawati, K. (2022). Gross domestic product: Financing & investment activities and state expenditures. Kinerja: Jurnal Manajemen Organisasi Dan Industri, 1(1), 11–18.

  28. Geda, A., & Tafere, K. (2008, October 10). The galloping inflation in Ethiopia: A cautionary tale for aspiring ‘developmental states’ in Africa.'Developmental_States'_in_Africa

  29. Ghalayini, L. (2011). The interaction between oil price and economic growth. Middle Eastern Finance and Economics, 13, 127–141.

  30. Harahap, B., Risfandy, T., & Futri, I. N. (2023). Islamic law, Islamic finance, and Sustainable Development Goals: A systematic literature review. Sustainability, 15(8), 6626.

  31. Hartarska, V., Nadolnyak, D., & Shen, X. (2015). Agricultural credit and economic growth in rural areas. Agricultural Finance Review, 75(3), 302–312.

  32. Hasan, Z. (2023). The value and performance of Islamic banking in Indonesia. Iqtishadia, 15(2), 191–214.

  33. Hassan, M. K., Rabbani, M. R., & Chebab, D. (2021). Integrating Islamic finance and halal industry: Current landscape and future forward. International Journal of Islamic Marketing and Branding, 6(1), 60–78.

  34. Hayet, H. (2016). Analisis pengaruh pertumbuhan pembiayaan modal kerja, investasi dan konsumsi pada perbankan umum syariah terhadap pertumbuhan produk domestik regional bruto (PDRB) Kalimantan Barat periode 2009-2013 [Analysis of the effect of growth in working capital financing, investment and consumption in Islamic banking on the growth of West Kalimantan’s gross regional domestic product (GRDP) in the period 2009-2013]. Jurnal Ekonomi Bisnis Dan Kewirausahaan, 5(1), 54–72.

  35. Herianingrum, S., Ratnasari, R. T., Widiastuti, T., Mawardi, I., Amalia, R. C., & Fadhlillah, H. (2019). The impact of Islamic bank financing on business. Entrepreneurship and Sustainability Issues, 7(1), 133–145.

  36. Herlina, E. (2014). Faktor-faktor yang mempengaruhi belanja daerah serta dampaknya terhadap produk domestik regional bruto Kabupaten Berau [Factors affecting regional spending and their impact on the regional gross domestic product of Berau Regency]. Journal of Innovation in Business and Economics, 4(1), 25.

  37. Holzman, F. D. (1959). Creeping inflation. The Review of Economics and Statistics, 41(3), 324–329.

  38. Hussain, M., Shahmoradi, A., & Turk, R. (2015). An overview of Islamic finance (IMF Working Papers WP/15/120; pp. 1–35). The International Monetary Fund.

  39. Ilmy, R. M., & Setiawan, I. (2019). The concept of production, distribution, and consumption in Islamic economics. Review of Islamic Economics and Finance, 2(1), 41–46.

  40. Iqbal, Z., & Mirakhor, A. (2010). An Islamic perspective on economic development. In W. El-Ansary & D. K. Linnan (Eds.), Muslim and christian understanding: Theory and application of “a common word” (pp. 221–233). Palgrave Macmillan US.

  41. Jan, S., Ullah, K., & Asutay, M. (2015). Knowledge, work, and social welfare as Islamic socioeconomic development goals (SSRN Scholarly Paper No. 2836305).

  42. Johnson, H. G. (1963). A survey of theories of inflation. Indian Economic Review, 6(3), 29–69.

  43. Kafabih, A., & Manzilati, A. (2018). A hadith about riba and the relationship with occupation: Which one is preferable between merchant and islamic bank clerk? Journal of Islamic Economics Lariba, 4(1), 37–45.

  44. Kammer, A., Norat, M., Piñón-Farah, M. A., Prasad, A., Towe, Christopher M., Zeidane, Z., & an IMF Staff Team. (2015). Islamic finance: Opportunities, challenges, and policy options [IMF Staff Discussion Notes No. 2015/005]. The International Monetary Fund.

  45. Kim, H. J., Lee, D., Son, J. C., & Son, M. K. (2014). Household indebtedness in Korea: Its causes and sustainability. Japan and the World Economy, 29, 59–76.

  46. Kračun, D. (1988). A cost-push model of galloping inflation: The case of Yugoslavia. In H. Motamen (Ed.), Economic modelling in the OECD countries (pp. 507–538). Springer Netherlands.

  47. Laldin, M. A., & Djafri, F. (2021). The role of Islamic Finance in achieving Sustainable Development Goals (SDGs). In M. K. Hassan, M. Saraç, & A. Khan (Eds.), Islamic finance and sustainable development (pp. 107–126). Springer.

  48. Lutfi, B. A., Prasetyo, A., Timur, Y. P., & Rifqi, M. (2023). Exploring gender differences in determinants of Bank Aladin Sharia adoption: A multi-group analysis approach. Jurnal Ekonomi Dan Bisnis Airlangga, 33(1), 40–52.

  49. Mandel, B. R., & Seydl, J. (2016). Credit conditions and economic growth: Recent evidence from US banks. Economics Letters, 147, 63–67.

  50. Mas’ad, M. A., & Wakil, N. A. A. (2020). Halal industry and Islamic finance institution’s role: Issues and challenges. INSLA E-Proceedings, 3(1), 643–659.

  51. Muttaqin, R. (2018). Pertumbuhan ekonomi dalam perspektif Islam [Economic growth in an Islamic perspective]. Maro: Jurnal Ekonomi Syariah Dan Bisnis, 1(2), 117–122.

  52. Nofrianto, N., Muliana, Y., & Cahyadi, A. (2021). The impact of islamic bank financing, government spending, and investment on economic growth in Indonesia. Signifikan: Jurnal Ilmu Ekonomi, 10(2), 299–310.

  53. Nugraha, A. L., Janwari, Y., Athoillah, M. A., & Mulyawan, S. (2023). Inflation and monetary policy: Bank Indonesia’s role in suppressing the inflation rate of Islamic economic objectives. Islamic Economics and Business Review, 2(1), 96–111.

  54. Otoritas Jasa Keuangan. (2021). Sharia banking statistic—December 2020. Otoritas Jasa Keuangan.

  55. Panuntun, B., & Sutrisno, S. (2019). Faktor penentu penyaluran kredit perbankan: Studi kasus pada bank konvensional di Indonesia [Determinants of bank lending: Case studies on conventional banks in Indonesia]. JAD : Jurnal Riset Akuntansi & Keuangan Dewantara, 1(2), 57–66.

  56. Parakassi, I. (2017). Inflasi dalam perspektif islam [Inflation in an Islamic perspective]. Laa Maisyir: Jurnal Ekonomi Islam, 4(2), 41–58.

  57. Rachman, M. A., & Syamsuddin. (2019). Halal industry in Indonesia: Role of sharia financial institutions in driving industrial and halal ecosystem. Al-Iqtishad: Jurnal Ilmu Ekonomi Syariah, 11(1), 35–58.

  58. Ramadhanty, R. P., & Auwalin, I. (2021). Pengaruh pembiayaan perbankan bank umum syariah terhadap PDRB provinsi di Indonesia tahun 2010-2019 [The influence of Islamic commercial bank banking financing on provincial GRDP in Indonesia in 2010-2019]. Jurnal Ekonomi Syariah Teori Dan Terapan, 8(1), 8–17.

  59. Rokhim, R., & Yanti, M. I. S. M. (2014). Risiko NPL kredit bank pembangunan daerah sebagai regional champion [Non-performing loan risk of regional development bank loans as regional champions]. Jurnal Keuangan Dan Perbankan, 18(1), 120–129.

  60. Sargent, T. J., & Wallace, N. (1973). Rational expectations and the dynamics of hyperinflation. International Economic Review, 14(2), 328–350.

  61. Sari, M. D., Bahari, Z., & Hamat, Z. (2016). History of Islamic bank in Indonesia: Issues behind its establishment. International Journal of Finance and Banking Research, 2(5), 178–184.

  62. Sassi, S., & Gasmi, A. (2014). The effect of enterprise and household credit on economic growth: New evidence from European Union countries. Journal of Macroeconomics, 39, 226–231.

  63. Schultze, C. L. (1960). Creeping inflation Causes and consequences. Business Horizons, 3(2), 65–77.

  64. Sholihin, M., Andari, D., Sholihin, M., & Andari, D. (2022). Islamic banking and Islamic accounting in Indonesia: History and recent development. In N. M. Alsharari (Ed.), Banking and accounting issues (pp. 1–15). IntechOpen.

  65. Supartoyo, Y. H., Juanda, B., Firdaus, M., & Effendi, J. (2018). Pengaruh sektor keuangan bank perkreditan rakyat terhadap perekonomian regional wilayah Sulawesi [The influence of the people’s credit bank financial sector on the regional economy of the Sulawesi region]. Kajian Ekonomi Dan Keuangan, 2(1), 15–38.

  66. Susanto, A. B., & Rachmawati, L. (2013). Pengaruh indeks pembangunan manusia (IPM) dan inflasi terhadap pertumbuhan ekonomi di Kabupaten Lamongan [The effect of the human development index (IPM) and inflation on economic growth in Lamongan Regency]. Jurnal Pendidikan Ekonomi (JUPE), 1(3).

  67. Taujiharrahman, D., El-Junusi, R., & Fataron, Z. A. (2021). Financing relations of MSME and non-MSMEs, number of syariah bank offices to gross regional domestic product. Al-Arbah: Journal of Islamic Finance and Banking, 3(1), 1–20.

  68. Taylor, J. B. (2019). Inflation targeting in high inflation emerging economies: Lessons about rules and instruments. Journal of Applied Economics, 22(1), 103–116.

  69. Timur, Y. P., & Herianingrum, S. (2022). The influence of entrepreneurship education on entrepreneurial intentions in Generation Z Muslim. Jurnal Ekonomi Dan Bisnis Airlangga, 32(1), 81–92.

  70. Timur, Y. P., Ratnasari, R. T., & Author, N. (2022). Celebrity endorsers vs expert endorsers: Who can affect consumer purchase intention for halal fashion product? Jurnal Ekonomi Dan Bisnis Islam, 8(2), 220–236.

  71. Umar, Z., Kenourgios, D., Naeem, M., Abdulrahman, K., & Al Hazaa, S. (2020). The inflation hedging capacity of Islamic and conventional equities. Journal of Economic Studies, 47(6), 1377–1399.

  72. United Nations in Indonesia. (2021). United Nations in Indonesia country results report 2020. United Nations in Indonesia.

  73. Utama, A. S. (2018). History and development of Islamic banking regulations in the national legal system of Indonesia. Al-’Adalah, 15(1), 37–50.

  74. Wahyuningsih, I., & Nurzaman, M. S. (2020). Islamic financial instruments and economic growth; An evidence from Indonesia. 2020 6th International Conference on Information Management (ICIM), 46–50.

  75. Wasiaturrahma, Sukmana, R., Ajija, S. R., Salama, S. C. U., & Hudaifah, A. (2020). Financial performance of rural banks in Indonesia: A two-stage DEA approach. Heliyon, 6(7), e04390.

  76. Wooldridge, J. M. (2010). Econometric analysis of cross section and panel data (Second edition). The MIT Press.

  77. Wulan, E. R., & Nurfaiza, S. (2014). Analysis of factors affecting inflation in Indonesia: An Islamic perspective. International Journal of Nusantara Islam, 2(2), 67–80.

  78. Yulianti, R. T. (2002). Riba dalam perspektif ekonomi Islam [Riba in the perspective of Islamic economics]. Millah, 1(2), 51–70.