Profit-and-Loss Sharing Financing, Operating Expenses, and the Intermediation Costs of Islamic Rural Banks in Indonesia

Robiatun NB, Fahmia; Susamto, Akhmad Akbar; Saleh, Samsubar

doi:10.21098/jimf.v10i2.1914

Jurnal SINTA 1

Profit-and-Loss Sharing Financing, Operating Expenses, and the Intermediation Costs of Islamic Rural Banks in Indonesia

Journal of Islamic Monetary Economics and Finance · Vol. 10 No. 2 (2024) · hlm. 379–396

DOI: 10.21098/jimf.v10i2.1914
ISSN: 2460-6618, 2460-6146
Terbit: 2024-05-31
Penerbit: Bank Indonesia
Bahasa: eng

Abstrak

This paper examines the effect of profit-and-loss sharing financing (PLS financing) and operating expenses on the intermediation costs of Islamic rural banks in Indonesia. Using a panel dataset of 147 Islamic rural banks over the period 2011-2021 and dynamic panel regressions, it shows that, in general, PLS financing exerts no significant influence on the Islamic rural banks’ intermediation costs, as measured by the net margin. Meanwhile, the operating expenses are significantly and positively affecting the banks’ net margin, the result that is robust to different regression specifications. Accordingly, the initiatives to promote PLS financing will, at least, not necessarily have a detrimental effect on the net margin. Operating expenses matter more, underscoring the need for serious efforts to improve the effectiveness of Islamic local banks’ cost management.

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Tadulako University
Universitas Gadjah Mada
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Rekan penulis	Organisasi	Artikel bersama
Rahadatul Mardhiyah	Afiliasi tidak diketahui	1
Duddy Roesmara Donna	Afiliasi tidak diketahui	1
Catur Sugiyanto	Universitas Gadjah Mada	1
Mustofa Mustofa	Tadulako University	1
Bhimo Rizki	Afiliasi tidak diketahui	1
Bambang Suprayitno	Afiliasi tidak diketahui	1
Samsul Hidayat	Afiliasi tidak diketahui	1

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Sumber metadata: OAI-PMH (metadata jurnal) http://www.jimf-bi.org/index.php/JIMF/oai, pertama di-harvest 9 Nov 2026, terakhir terlihat 9 Nov 2026.

Metadata asli (oai_dc)

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	<dc:title xml:lang="en">Profit-and-Loss Sharing Financing, Operating Expenses, and the Intermediation Costs of Islamic Rural Banks in Indonesia</dc:title>
	<dc:creator xml:lang="en">Robiatun NB, Fahmia</dc:creator>
	<dc:creator xml:lang="en">Susamto, Akhmad Akbar</dc:creator>
	<dc:creator xml:lang="en">Saleh, Samsubar</dc:creator>
	<dc:subject xml:lang="en">Net margin, PLS financing, Operating expenses, Islamic bank, BPRs.</dc:subject>
	<dc:description xml:lang="en">This paper examines the effect of profit-and-loss sharing financing (PLS financing) and operating expenses on the intermediation costs of Islamic rural banks in Indonesia. &amp;nbsp;Using a panel dataset of 147 Islamic rural banks over the period 2011-2021 and dynamic panel regressions, it shows that, in general, PLS financing exerts no significant influence on the Islamic rural banks’ intermediation costs, as measured by the net margin. Meanwhile, the operating expenses are significantly and positively affecting the banks’ net margin, the result that is robust to different regression specifications. Accordingly, the initiatives to promote PLS financing will, at least, not necessarily have a detrimental effect on the net margin. Operating expenses matter more, underscoring the need for serious efforts to improve the effectiveness of Islamic local banks’ cost management.</dc:description>
	<dc:publisher xml:lang="en">Bank Indonesia</dc:publisher>
	<dc:date>2024-05-31</dc:date>
	<dc:type>info:eu-repo/semantics/article</dc:type>
	<dc:type>info:eu-repo/semantics/publishedVersion</dc:type>
	<dc:type xml:lang="en">Peer-reviewed Article</dc:type>
	<dc:format>application/pdf</dc:format>
	<dc:identifier>https://jimf-bi.org/JIMF/article/view/1914</dc:identifier>
	<dc:identifier>10.21098/jimf.v10i2.1914</dc:identifier>
	<dc:source xml:lang="en">Journal of Islamic Monetary Economics and Finance; Vol. 10 No. 2 (2024); 379-396</dc:source>
	<dc:source>2460-6618</dc:source>
	<dc:source>2460-6146</dc:source>
	<dc:source>10.21098/jimf.v10i2</dc:source>
	<dc:language>eng</dc:language>
	<dc:relation>https://jimf-bi.org/JIMF/article/view/1914/973</dc:relation>
	<dc:rights xml:lang="en">Copyright (c) 2024 Journal of Islamic Monetary Economics and Finance</dc:rights>
</oai_dc:dc>