Does Islamic Banking Financing Help the Poor?

Achmad Tohirin, Fauzan Husaini

Abstract

This study aims to examine the effect of Islamic banking financing in helping poor people. Panel data starts from 2014q1-2018q2 collected from six countries were used in this study. The analysis method used is the panel data analysis. Private consumption expenditure is used to measure the level of poverty. Total Shariah- Compliant Financing is used to measure Islamic banking financing value. Several control variables are involved, such as conventional bank credit, consumer price index and economic growth. The result showed that Islamic banking financing has an effect in reducing the level of poverty better than conventional banking in these countries.

Keyword: Islamic Banking, Poverty, Financing

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