Abstract
<p>This research aims to analyze the elasticity of demand for Islamic bank's financing in Indonesia. The variables observed in this study is inflation and income per capita. This research uses time series of data for the period 2004-2015, which is a secondary data. The Data is sourced from the central bank of Indonesia and Indonesian Central Bureau of Statistics, the models used in this study is a model of multiple regression equations and Analyzed using Ordinary Least Squares (OLS). Based on the estimates, the Research found that the inflation and income per capita significantly influence elasticity of demand for Islamic bank's financing in Indonesia. The elasticity of demand for Islamic bank's financing is inelastic to changes in price. This means that the demand Islamic bank's financing in Indonesia are not sensitive to changes in price. So, Islamic banks must be-able using other factors for growth Reviews their financing.</p><p><br />Keywords: Elasticity of Demand, Income per Capita, Inflation, Islamic bank’s financing</p>
Highlights
The price elasticity of demand for loans or financing has major implications for the macro economy, finance, and development
In analyzing the factors affecting the banking sharia financing in Indonesia to determine whether the financing request elasticity of Islamic banking in Indonesia is influenced by inflation and per capita income used multiple linear analysis, using ordinary least squares (OLS)
From the results of the above estimation can be analyzed as follows: 1. Inflation has a negative effect on the elasticity of demand for Islamic banking financing and has a coefficient of -0.016958
Summary
The price elasticity of demand for loans or financing has major implications for the macro economy, finance, and development. The continuity of the elasticity of demand affects the amount of substitution between inter-temporal in response to changes in the real interest rate, so the impact on a number of macroeconomic problems, including the composition and level of aggregate demand, the amount of interest tax, the burden of the national debt or social security funded and consumption cycle (Hall, 1988). The demand elasticity explains that the importance of interest rate subsidies and strategies need to be designed to improve access to credit (Morduch, 2000). Research conducted by Karlan & Zinman (2005) who observed the elasticity of demand for consumer credit by presenting the parameter estimates are derived from a randomized trial. As well as finding the loan amount is more responsive to changes in the maturity of the loan from interest rate changes
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