Determinant of the Equity Based Financing Volume: A Case of Islamic Banks in Indonesia

Abstract

The aim of this research is to examine the influence of Third Party Funds, Profitability (Return on Assets), Risk (Non Performing Finance) and Cost Efficiency (Operational Cost Efficiency Ratio) on Equity Based Financing Volume of Islamic banks in Indonesia. The research population was Islamic banks registered in the Central Bank of Indonesia (BI). Chosen by using purposive sampling method, this research used 13 banks as sample. This study used multiple regression analysis as the method. The result of this research indicates that: (1) Third Party Funds has positive effect on Equity Based Financing Volume; (2) Profitability has no influence on Equity Based Financing Volume; (3) Risk has no significant influence on Equity Based Financing Volume; (4) Cost Efficiency has positive effect on Equity Based Financing Volume.

Keywords: Third Party Fund, Return on Assets, Non Performing Finance, Operational Cost Efficiency Ratio, Equity Based Financing Volume