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The Influence of Conventional Banking and Sharia Banking on Economic Growth in Indonesia

Jurnal Ilmiah Peuradeun · Vol. 13 No. 1 (2025) · pp. 223–250

DOI
10.26811/peuradeun.v13i1.1418
ISSN
2443-2067, 2338-8617
Published
2025-01-30
Publisher
SCAD Independent
Language
eng
License
creativecommons.org/licenses/by-sa/4.0

Abstract

The financial sector is referred to as one of the factors influencing the monetary crisis. This study examined the relationship between the banking development score in the dual banking system model and economic growth in Indonesia. This study used a quantitative method, using the VECM approach and the Granger Causality model. The findings showed that Conventional Banking Credit Growth, Sharia Banking Financing Growth, PMTB, LDR and FDR, and ROA of conventional and Sharia banks had a positive effect on economic growth in Indonesia. The inflation variables, NPF, and NPL had a negative effect on economic growth in Indonesia. This finding provided us with an understanding that the existence of Sharia banking could drive economic growth in Indonesia. In conventional banks, in the long term, there was a long-term relationship between the independent variables and the dependent variables. This study provided new insights into the influence of the banking sector on economic growth in Indonesia, highlighting the importance of synergy between conventional and Islamic banking in creating diverse financial instruments and enhancing access to banking services, especially in areas with limited financial access.

Keywords

Collaboration network of the authors

15 authors · 25 co-authorship links · 1 across different organisations

Hover or tap a name to highlight its co-authors. Double-click to open the author's page.

  • Lambung Mangkurat University
  • Universitas Gadjah Mada
  • Affiliation unknown
  • Different organisations
  • Same organisation
  • Affiliation unknown
  • Thicker line = more joint articles · bigger circle = more articles
Show as table
Co-authorOrganisationJoint articles
Fanda FadillaAffiliation unknown1
Faisal FauzanAffiliation unknown1
Ira MaghfirahAffiliation unknown1
Teuku ZulfikarAffiliation unknown1
Armiadi MusaAffiliation unknown1
Azhari AzhariUniversitas Gadjah Mada1
Faisal FaisalLambung Mangkurat University1
Heru FahleviAffiliation unknown1
Siti MaqfirahAffiliation unknown1
Teuku Roli Ilhamsyah PutraAffiliation unknown1
Maulidar AgustinaAffiliation unknown1

Affiliations come from OpenAlex; journal OAI-PMH metadata carries none. Authors without an OpenAlex ID are matched by name, which can merge or split people.

Metadata source: OAI-PMH (metadata jurnal) https://journal.scadindependent.org/index.php/jipeuradeun/oai, first harvested 7 Nov 2026, last seen 8 Nov 2026.
Original metadata (oai_dc) 
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	<dc:title xml:lang="en">The Influence of Conventional Banking and Sharia Banking on Economic Growth in Indonesia</dc:title>
	<dc:creator xml:lang="en">Mutia, Ratna</dc:creator>
	<dc:creator xml:lang="en">Masbar, Raja</dc:creator>
	<dc:creator xml:lang="en">Abd. Majid, M. Shabri</dc:creator>
	<dc:creator xml:lang="en">Khalidin, Bismi</dc:creator>
	<dc:subject xml:lang="en">Conventional Banking</dc:subject>
	<dc:subject xml:lang="en">Sharia Banking</dc:subject>
	<dc:subject xml:lang="en">Granger Causality</dc:subject>
	<dc:subject xml:lang="en">VECM</dc:subject>
	<dc:subject xml:lang="en">Social Sciences</dc:subject>
	<dc:description xml:lang="en">The financial sector is referred to as one of the factors influencing the monetary crisis. This study examined the relationship between the banking development score in the dual banking system model and economic growth in Indonesia. This study used a quantitative method, using the VECM approach and the Granger Causality model. The findings showed that Conventional Banking Credit Growth, Sharia Banking Financing Growth, PMTB, LDR and FDR, and ROA of conventional and Sharia banks had a positive effect on economic growth in Indonesia. The inflation variables, NPF, and NPL had a negative effect on economic growth in Indonesia. This finding provided us with an understanding that the existence of Sharia banking could drive economic growth in Indonesia. In conventional banks, in the long term, there was a long-term relationship between the independent variables and the dependent variables. This study provided new insights into the influence of the banking sector on economic growth in Indonesia, highlighting the importance of synergy between conventional and Islamic banking in creating diverse financial instruments and enhancing access to banking services, especially in areas with limited financial access.</dc:description>
	<dc:publisher xml:lang="en">SCAD Independent</dc:publisher>
	<dc:date>2025-01-30</dc:date>
	<dc:type>info:eu-repo/semantics/article</dc:type>
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	<dc:identifier>https://journal.scadindependent.org/index.php/jipeuradeun/article/view/1418</dc:identifier>
	<dc:identifier>10.26811/peuradeun.v13i1.1418</dc:identifier>
	<dc:source xml:lang="en">Jurnal Ilmiah Peuradeun; Vol. 13 No. 1 (2025): Jurnal Ilmiah Peuradeun; 223-250</dc:source>
	<dc:source>2443-2067</dc:source>
	<dc:source>2338-8617</dc:source>
	<dc:language>eng</dc:language>
	<dc:relation>https://journal.scadindependent.org/index.php/jipeuradeun/article/view/1418/944</dc:relation>
	<dc:relation>https://journal.scadindependent.org/index.php/jipeuradeun/article/view/1418/974</dc:relation>
	<dc:rights xml:lang="en">Copyright (c) 2025 Jurnal Ilmiah Peuradeun</dc:rights>
	<dc:rights xml:lang="en">http://creativecommons.org/licenses/by-sa/4.0</dc:rights>
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