The Role of Sharia Banks in Sustainable Development During Indonesia's Economic Recovery Post-Covid-19

Diah Dharmayanti; Abdul Aziz; Joko Suhariyanto; Yusuf Setyadi

doi:10.29313/amwaluna.v8i2.3569

Authors

Diah Dharmayanti Universitas Siber Asia
Abdul Aziz IAIN Syekh Nurjati Cirebon
Joko Suhariyanto Universitas Siber Asia
Yusuf Setyadi Universitas Siber Asia

DOI:

https://doi.org/10.29313/amwaluna.v8i2.3569

Keywords:

Sharia Banks, Sustainable Development, Nasional Economy, New Normal, Coronavirus Pandemic

Abstract

Since Covid-19 appeared three years ago an undeniable economic recession has hit the world including Indonesia, the economy has slid drastically to minus 5 in 2020-2021. However, it finally revived after the new normal adaptation era in 2022, GDP showed a positive trend. This is of course because the role of Sharia banking, especially in assisting the national economic recovery program, shows a significant level. Research using a qualitative approach through descriptive methods yields findings that Indonesia's GDP per capita increases from 57.3 in 2022 to IDR 62.1 million in 2021 (an increase of 8.6%) equivalent to USD 4,349.5. The PEN program in 2021 also experienced a ceiling increase of Rp. 658.6 T (88.4%) from a ceiling of Rp. 744.77 T which was higher than the previous year of Rp. 575.8 T. The role and contribution of Sharia banks in serving financing in the MSME sector is becoming thing done completely. This is the achievement of Islamic banking in the new normal adaptation time of the Covid-19 outbreak.

Author Biography

Diah Dharmayanti, Universitas Siber Asia

Organization Mangement

References

Ahamat, A. (2017). Is Islamic banking and finance doing enough? Shaping the sustainable and socially responsible investment community. Asian Social Science, 13(3), 170-176. https://doi.org/10.5539/ass.v13n3p170

Ali, H., Abdullah, R., & Zaini, M. Z. (2019). Fintech and its potential impact on Islamic banking and finance industry: A case study of Brunei Darussalam and Malaysia. International Journal of Islamic Economics and Finance (IJIEF), 2(1), 73-108. https://doi.org/10.18196/ijief.2116

Aliyu, S., Hassan, M. K., Mohd Yusof, R., & Naiimi, N. (2017). Islamic banking sustainability: A review of literature and directions for future research. Emerging Markets Finance and Trade, 53(2), 440-470.

Anggarini, D. T., & Rakhmanita, A. (2020). Government Policies for Economic Recovery and Handling COVID-19 Virus in Indonesia. Moneter-Jurnal Akuntansi Dan Keuangan, 7(2), 140-146.

Ascarya, A. (2021). The role of Islamic social finance during Covid-19 pandemic in Indonesia’s economic recovery. International Journal of Islamic and Middle Eastern Finance and Management.

Bilgin, M. H., Danisman, G. O., Demir, E., & Tarazi, A. (2021). Economic uncertainty and bank stability: Conventional vs. Islamic banking. Journal of Financial Stability, 56, 100911.

Biancone, P. P., Saiti, B., Petricean, D., & Chmet, F. (2020). The bibliometric analysis of Islamic banking and finance. Journal of Islamic Accounting and Business Research.

Beatty, Amanda, Menno Pradhan, Daniel Suryadarma, Florischa Ayu Tresnatri & Goldy Fariz Dharmawan. (2020). Recovering Learning Losses as Schools Reopen in Indonesia: Guidance for Policymakers. Policy Brief. Oxford: RISE.

BPS (Statistics Indonesia). 2020. Perilaku Masyarakat di Masa Pandemi Covid-19 [Public behaviour in the time of the Covid-19 pandemic]. Jakarta: BPS.

Cahyono, E. F., Rani, L. N., & Mardianto, M. F. F. (2021). Determinants of Indonesian Conventional and Islamic Bank Depositor Trust During the Covid-19 Pandemic. Journal of Islamic Monetary Economics and Finance, 7, 1-32.

Fauziyah, F., & Afkar, T. (2021). Test of Differences in The Ability of Islamic Banks in Indonesia Trough Equity Management to Earn Profit. International Journal of Economics, Business and Accounting Research (IJEBAR), 5(4).

Hassan, M. K., Rabbani, M. R., & Ali, M. A. (2020). Challenges for the Islamic finance and banking in post COVID era and the role of Fintech. Journal of Economic Cooperation and Development, 43(3), 93–116.

Haron, R., Barre, G. M., & Othman, A. H. A. (2021). Zakat and the performance of Islamic banks: empirical evidence. In Handbook of Research on Islamic Social Finance and Economic Recovery After a Global Health Crisis (pp. 67-84). IGI Global.

Haseeb, M. (2018). Emerging issues in islamic banking & finance: Challenges and Solutions. Academy of Accounting and Financial Studies Journal, 22, 1-5.

Hidayati, N., Siregar, H., & Pasaribu, S. H. (2017). Determinant of efficiency of the Islamic banking in Indonesia. Buletin Ekonomi Moneter dan Perbankan, 20(1), 29-48.

Hudaefi, F. A., & Badeges, A. M. (2021). Maqāṣid al-Sharī ‘ah on Islamic banking performance in Indonesia: a knowledge discovery via text mining. Journal of Islamic Marketing.

Idries, F. A., Sholihin, A., & Satibi, I. (2021). The Challenge of Merger Result Bank during the Global Economic Recession due to the Covid-19 Pandemic: Case Study of Indonesian Islamic Banks. Global Review of Islamic Economics and Business, 9(2), 001-017.

Islahi, A. A. (2018). History of Islamic Banking and Finance. Intellectual Discourse, 26.

Islam, J. U., & Rahman, Z. (2017). Awareness and willingness towards Islamic banking among Muslims: An Indian perspective. International Journal of Islamic and Middle Eastern Finance and Management, 10(1), 92-101.

Iskandar, A., Possumah, B. T., & Aqbar, K. (2021). Global Covid-19: What Islamic Economic and Finance Can Do? Indonesia Experience. IJIBE (International Journal of Islamic Business Ethics), 6(2), 119-134.

Istifadhoh, N., A’yun, I., & Mufidhoh, H. (2021). Sharia Fintech As an Instrument Of National Economic Recovery Amid The Covid-19 Pandemic. Dinar: Jurnal Ekonomi dan Keuangan Islam, 8(2), 66-77.

Jayengsari, R. A., & Husnaeni, U. A. (2020). Management of financial inclusion in Islamic Banking: evidence from Indonesia. Agregat: Jurnal Ekonomi dan Bisnis, 4(1), 44-58.

Ledhem, M. A., & Mekidiche, M. (2021). Islamic finance and economic growth nexus: empirical evidence from Southeast Asia using dynamic panel one-step system GMM analysis. Journal of Islamic Accounting and Business Research.

Kacaribu, Febrio. 2020. ‘Economic Challenges Facing Indonesia’. OECD webinar presentation on Tax Challenges and Reforms to Finance the Covid-19 Recovery and Beyond, 1 October. https://www.oecd.org/tax/webinar-tax-challenges-and-reforms-to-finance-the-covid-19-recovery-and-beyond-october-2020.htm

Karim, S.; Manab, N.A.; Ismail, R.B. (2019). Legitimising the role of corporate boards and corporate social responsibility on the performance of Malaysian listed companies. Indian J. Corp. Gov. 12, 125–141.

Karimu, A., Salia, S., Ibrahim, A. J., & Alagidede, I. P. (2022). Islamic Banking and Finance in Africa. In The Economics of Banking and Finance in Africa: Developments in Africa’s Financial Systems (pp. 431-451). Cham: Springer International Publishing.

Khan, F. (2010). How ‘islamic’is islamic banking? Journal of economic behavior & organization, 76(3), 805-820.

Khotimah, D. R. K. (2022). Big Data: How Public Response to Islamic Economy in Indonesia during Pandemic? AL-MUZARA'AH, 1-16.

Mardhiyaturrositaningsih, M., & Janah, R. (2023). Strategy of Islamic Rural Banks Improving Financial Performance During the Covid-19 Pandemic. Amwaluna: Jurnal Ekonomi dan Keuangan Syariah, 7(2), 290-302. https://doi.org/10.29313/amwaluna.v7i2.8915

Marlina, L., Rusydiana, A. S., Hidayat, P., & Firdaus, N. (2021). Twenty years of Islamic banking in Indonesia: A biblioshiny application. Library Philosophy and Practice (e-journal), 4999.

Nawaz, H. (2019). An investigation into factors that determine the growth rate in the Islamic banking and finance. Future Business Journal, 5(1), 1-15.

Nikmah, A. N. N., Suryanto, T., & Surono, S. (2020). Evaluation Of Dual Banking System In Banking In Indonesia. Islamiconomic: Jurnal Ekonomi Islam, 11(2).

Nugroho, L., Utami, W., Doktorlina, C. M., Soekapdjo, S., & Husnadi, T. C. (2017). Islamic banking capital challenges to increase business expansion (Indonesia cases). International Journal of Commerce and Finance, 3(2), 1-10.

Nugroho3, L., Utami, W., & Doktoralina, C. M. (2020). COVID-19 and the Potency of Disruption on the Islamic Banking Performance (Indonesia Cases). International Journal of Economic and Business Applied, 1(1).

Olivia, Gibson and Nasrudin’s August Survey in BIES for a discussion of social protection programs. The online appendix table compares the details of programs in the pre-and post-Covid periods to show how they have been expanded to accommodate the PEN package.

Ponziani, R. M., & Mariyanti, T. (2020). Islamic bank and monetary policy: the case of Indonesia. International Journal of Islamic Economics and Finance (IJIEF), 3(1), 121-142.

PY Lai, K., & Samers, M. (2017). Conceptualizing Islamic banking and finance: a comparison of its development and governance in Malaysia and Singapore. The Pacific Review, 30(3), 405-424.

Rabbani, M.R.; Abdulla, Y.; Basahr, A.; Khan, S.; Moh’d Ali, M.A. (2020). Embracing of Fintech in Islamic Finance in the post COVID era. In Proceedings of the 2020 International Conference on Decision Aid Sciences and Application (DASA), Online, 8–9 November 2020; IEEE: New York, NY, USA. pp. 1230–1234.

Rabbanii, M. R., Bashar, A., Nawaz, N., Karim, S., Ali, M. A. M., Rahiman, H. U., & Alam, M. (2021). Exploring the role of Islamic fintech in combating the aftershocks of COVID-19: the open social innovation of the Islamic financial system. Journal of Open Innovation: Technology, Market, and Complexity, 7(2), 136.

Raza Rabbani, M.; Asad Mohd, A.M.; Rahiman, H.U.; Atif, M.; Zulfikar, Z.; Naseem, Y. (2021). The Response of Islamic Financial Service to the COVID-19 Pandemic: The Open Social Innovation of the Financial System. J. Open Innov. Technol. Mark. Complex. 7, 85.

Riaz, U., Khan, M., & Khan, N. (2017). An Islamic banking perspective on consumers’ perception in Pakistan. Qualitative Research in Financial Markets.

Rousseau, P. L., & Wachtel, P. (1998). Financial intermediation and economic performance: historical evidence from five industrialized countries. Journal of money, credit and banking, 657-678.

Rusydiana, A. S., & Sanrego, Y. D. (2018). Measuring the performance of Islamic banking in Indonesia: An application of Maslahah-efficiency quadrant (MEQ). Journal of Islamic Monetary Economics and Finance, 3, 79-98.

Safitri, T. A., Asnaini, A., & Idwal, I. (2021). The Role of Islamic Commercial Banks in the Recovery of the National Economy Affected by the Pandemic in Indonesia. Journal of Indonesian Management (JIM), 1(3), 323-331.

Sarea, A.; Bin-Nashwan, S.A. (2020). Guide to giving during the COVID-19 pandemic: The moderating role of religious belief on donor attitude. Int. J. Ethics Syst. 37, 90–104

Sarker, M. N. I., Khatun, M. N., & Alam, G. M. (2019). Islamic banking and finance: potential approach for economic sustainability in China. Journal of Islamic Marketing.

Saifurrahman, A., & Kassim, S. (2021). Issues and Challenges Facing Islamic Banks and MSME in Financial Inclusion in Indonesia. In Handbook of Research on Islamic Social Finance and Economic Recovery After a Global Health Crisis (pp. 308-325). IGI Global.

Shaharuddin, A. (2020). Do islamic banks act ‘Islamic’during covid-19 pandemic?. The Journal of Muamalat and Islamic Finance Research, 3-12.

Sparrow, R., Dartanto, T., & Hartwig, R. (2020). Indonesia under the new normal: Challenges and the way ahead. Bulletin of Indonesian Economic Studies, 56(3), 269-299.

Suleman, S., Majid, R., & Widiastuti, T. (2021). Zakat and Its Impact on Socio-Economic Welfare Before COVID-19 Pandemic in Indonesia. International Journal of Zakat, 6(2), 75-90.

Sumarto, Sudarno. (2020). ‘Kemiskinan dan Sistem Perlindungan Sosial Indonesia di Tengah Pandemi Covid-19 [Poverty and Indonesia’s social protection system amid the Covid-19 pandemic]. Presentation in IBER Webinar Series, 15 September.

Supriyatni, R., & Nurjamil, N. (2021). The Urgency of Handling Non-Performing Financing in Sharia Banks in the Development of Indonesian Sharia Economics. Padjadjaran Journal of Law, 8(1), 26-46.

Suyanto, S., Lestari, N. P., Yulianti, E. B., Yusroni, N., & Chadhiq, U. (2022). Understanding of Islamic banking financial management in the context of global economic competition. Linguistics and Culture Review, 6, 1-13.

Trimulato, T. (2021). The Role Of Islamic Economic Institutions To Recover Real Sector Of SMEs During COVID-19 Pandemic. Li Falah: Jurnal Studi Ekonomi dan Bisnis Islam, 6(1), 78-91.

Ulfa, Z. T., & Purwanto, P. (2020). Analysis of Financial Ratio That Affecting Total Financing of Bank Umum Syariah in Indonesia. MALIA: Journal of Islamic Banking and Finance, 4(2), 79-91.

Utama, A. S., & Dewi, S. (2020). Comparison of Good Corporate Governance Principles in Conventional Banks and Islamic Banks in Indonesia. PROCEEDING IAIN Batusangkar, 1(1), 57-66.

Yunita, P. (2020). The Future of Indonesia Islamic Banking Industry: Bankruptcy Analyzing the Second Wave of Global Financial Crisis. International Journal of Islamic Economics and Finance (IJIEF), 3(2), 199-226.