Financing growth and impaired financing: a study on Malaysian Islamic banks
Islamic banking in Malaysia has recorded tremendous development and growth in the last two decades. However, the level of financing growth of Islamic banks has experienced a declination in the recent years due to several factors. The main purpose of this research is to examine the relationship betwe...
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| Format: | Thesis |
| Language: | eng eng |
| Published: |
2018
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| Subjects: | |
| Online Access: | https://etd.uum.edu.my/8202/1/s822652_01.pdf https://etd.uum.edu.my/8202/2/s822652_02.pdf |
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| Summary: | Islamic banking in Malaysia has recorded tremendous development and growth in the last two decades. However, the level of financing growth of Islamic banks has experienced a declination in the recent years due to several factors. The main purpose of this research is to examine the relationship between financing growth and impaired financing particularly. At the same time, it attempts to investigate other determinants of financing growth such as capital (CAP), bank size (SIZE), gross domestic product (GDP), inflation (INF) and overnight policy rate (OPR). This is due to the importance of financing growth towards Islamic banks and lack of empirical research to distinctly establish the determinants of financing growth, especially in Malaysian Islamic banks. The secondary data was used from 16 Islamic banks in Malaysia over the 2012 – 2016 period (80 observations). This study employs Descriptive Statistics, Correlation Analysis, Diagnostic Tests, Panel Data Test and Multiple Regression Analysis as data analysis. The study reveals that external and internal factors, namely GDP, INF, IF and CAP are significantly influencing the financing growth of Malaysian Islamic banks. On the other hand, SIZE and OPR have no significant impact on the financing growth. The results provide statistical evidence that an increase in impaired financing reduces Islamic banks’ financing growth. Hence, the researcher suggests several recommendations to bankers and body regulations in order to minimize the level of impaired financing and thus, enabling the expansion of financing growth level in Malaysian Islamic banks. |
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