Intermediary Institutions Research Articles

China in Africa: companies as enablers and beneficiaries? An empirical evaluation of state-business relations in the Forum on China-Africa Cooperation

Abstract China’s strong economic presence in Africa has resulted in an increased interdisciplinary debate. Our contribution is the incorporation of a business perspective by uncovering the prominence and role of business in China’s diplomatic Africa engagement. Our theoretical contribution by applying the state-business relations (SBR) literature is to examine whether established frameworks can be expanded by an international dimension through intergovernmental initiatives like the Forum on China-Africa Cooperation (FOCAC). The paper conducts a document analysis of all declarations and Action Plans of all FOCAC conferences in the period 2000–2021, combining both a content and a thematic analysis based on an explorative and iterative coding process. Our data suggests that the prominence of businesses has increased while the scope of their activities and the number of focus sectors (especially infrastructure) has risen particularly since 2012. Companies are considered as enablers for political and economic goals in the state-driven FOCAC. We find that SBR frameworks are applicable to international contexts and propose an expanded SBR approach integrating transnational intermediary institutions like the intergovernmental FOCAC and transnational business platforms which facilitate positive state-business relations across countries and a conducive business environment.

Productive WAQF business models through the integration of Islamic social and commercial finance

Poverty is an apparent problem in Indonesia, with the number of people living in poverty reaching 26.36 million. Islamic Social Finance (ISF), especially through productive waqf instruments, is one of the prospective solutions to overcome this problem. Although Indonesia has enormous waqf potential, waqf realisation is still very low. There are several challenges in the waqf collection process, namely low literacy or public awareness, unprofessional management, and a lack of qualified human resources (nazhir). This research aims to determine the optimal productive waqf model to be implemented in Indonesia using the Delphi ANP-BOCR method. To strengthen the research results, this study also conducted a meta-analysis as a form of robustness check and a benefits, opportunities, costs, and risks (BOCR) analysis of each model as supporting arguments. The findings of this study show that Islamic banks as a way to leverage funds for waqf are the most prioritised model. This is because Islamic banks act as intermediary institutions that have great potential for optimising the collection and management of waqf funds, which can increase economic growth. This is reinforced by the results obtained from the meta-analysis and several supporting arguments, which show that Islamic financial institutions (including Islamic banks) can improve community welfare through the utilisation of social funds (including waqf). Besides that, this research also discusses an alternative model of productive waqf through digitalisation by adopting several technologies that aim to increase efficiency, transparency, and accessibility so as to optimise the collection and management of waqf funds more effectively and efficiently.

The effect of financial literacy on Indonesian women micro entrepreneurs through financial intermediation

Financial literacy and financial intermediation are vital tools for all businesses, particularly women micro-entrepreneurs. Even with modest means, they have been shown to considerably contribute to economic independence at the family, national, and international levels. Since Indonesian women microentrepreneurs still have trouble getting bank loans (being unbanked), the majority of them join cooperatives. Cooperatives are without doubt the financial intermediation institutions of choice for micro-communities; nonetheless, research on the subject is still scarce, particularly in developing nations. In order to bridge this gap, this study looks at the role of cooperatives as financial intermediation organizations. Examining the impact of financial literacy through cooperative financial intermediation on the financial performance of Indonesian women microentrepreneurs is the main goal of the study. The cross-sectional data were identified using purposive approaches and processed with the use of Smart PLS as part of an explanatory research approach. The direct influence test results demonstrate that enhancing financial performance and financial intermediation are directly impacted by financial literacy. Additionally, financial intermediation (cooperatives) was successful in influencing the impact of financial literacy on the financial performance of micro-entrepreneurs in Indonesia, according to the findings of the mediation effect test.

Empowerment of Ultra Micro MSME’s Through Financing of Sharia Non-Bank Financial Institutions

Economic growth, especially MSMEs, cannot be separated from the role of the microfinance institution sector. Financial institutions are intermediation institutions whose function is to connect parties who have excess funds with parties who lack funds. Based on Law No.10 of 1998 concerning amendments to Law No.7/1992 concerning banking, bank financial institutions consist of commercial banks and people's credit banks. The Ministry of Finance of the Republic of Indonesia, issued Ultra Micro Financing Products (UMI) which are The advanced stage program from the social assistance program to business independence targets micro businesses at the lowest levels, which cannot yet be facilitated by banking through People's Business Credits. UMI is a maximum financing facility of IDR 20 million per customer group and is distributed by non-bank financial institutions (LKBB). This research was carried out in North Sumatra (SUMUT) with the aim of identifying differences between Ultra Micro (UMi) business actors before and after receiving financing assistance from sharia non-bank financial institutions. This research was carried out between June and August 2023. This research uses quantitative analysis methods. The Normality Test is carried out with the aim of finding out whether the data used in a regression model is normally distributed or not. If the distributed data is proven to be normal, this means that the sample used can represent the population used by the measurement. If the significant value is 0.05, it can be declared to have a normal distribution. From the results of research on the Empowerment of Ultra Micro MSMEs through Sharia Non-Bank Financial Institution Financing in North Sumatra before and after receiving Ultra Micro Financing (UMi): There is a development between daily income before and after financing. Sales revenue after getting financing is better than sales revenue before getting financing

Peran Bank Syariah Indonesia (BSI) KCP Cirebon Sisingamangaraja Terhadap Perkembangan Sektor UMKM

MSME financing makes a major contribution to improving the performance of Islamic banks. The role of MSME financing is in accordance with the main role of Islamic banks as financial intermediary institutions, collecting funds from the public and channeling them in the form of financing. As in the case of the BSI KCP Sisingamangaraja Cirebon, it has carried out its duties as a collector of public funds and a distributor of funds, which of course will be channeled back to the community. It can be in the form of KPR, Mitra Guna, Gold Installments or other financing such as KUR and Non-KUR. The purpose of this study is to analyze the role of Bank Syariah Indonesia KCP Sisingamangaraja Cirebon in contributing to developing the MSME sector by helping to provide capital to customers who want to develop their business in the MSME sector, as well as what forms of education and motivation have been provided by the BSI KCP Sisingamangaraja Cirebon for MSME customers to get support so they can develop their business to the fullest. The type of research conducted by the author is field research using qualitative methods, while the research data collection techniques are collected through interviews, observation, documentation, books, journal articles and then analyzed using descriptive methods. The results of the research analysis carried out are in accordance with the formulation of the problem, namely: (1) The role of BSI KCP Sisingamangaraja related to capital assistance has several stages, namely: The stage of collecting documents, validation, financing process, field surveys, committees, contracts, disbursement, maintenance and repayment. (2) The role of BSI KCP Sisingamangaraja Cirebon related to education and motivation for MSMEs has not run optimally. BSI KCP Sisingamangaraja Cirebon has so far not held an MSME development program to educate how important and potential it is to develop MSME. Then, BSI KCP Sisingamangaraja Cirebon has so far not held training and digitization for MSME actors as a form of motivation provided by BSI.

Performance Analysis of Islamic Banks Using Error Correction Model

Introduction: The analysis of Islamic banking performance is a frequent subject of discussion in various literature. One factor that makes Islamic banks an exciting object of research is their role as Sharia-based intermediary institutions and their contribution to the effectiveness of monetary policy. This study aims to analyze the impact of CAR, NPF, FDR, and BOPO on the performance of Islamic banks measured by ROA and NOM. Research Methods: This quantitative research uses secondary data from Islamic Banking Statistics covering the period from January 2015 to December 2023. The data analysis technique employed is the Error Correction Model (ECM). Results: The results indicate that out of the four variables examined, only BOPO has a significant impact on the performance of Islamic banks. Conclusion: This finding suggests that efficiency in managing operational costs is a crucial factor in enhancing the financial performance of Islamic banks. The lower the BOPO, indicating higher cost efficiency, the better the performance of Islamic banks in terms of profitability as measured by ROA and NOM.

Do Macroeconomic Variables Affect Deposits in Shariah Banks?

Banks are intermediary institutions that collect funds from the public and channel them back in the form of credit and the funds collected are third party funds (TPF) which are the largest source of funds relied on by banks, including sharia banking. The challenge of sharia banking is to expand market share. Currently in Indonesia the banking market share is dominated by conventional banking. Increasing market share will increase savings in sharia banking and strengthen sharia banking as an intermediation institution. The research aims to identify the influence of macroeconomic variables on deposits in sharia banking. The research uses time-series data 2012: Q1 - 2022: Q1 and the ARDL method to estimate the short- and long-term influence of macroeconomic variables on TPF. The research results show that there are two variables that influence the short and long term, namely the GDP variable and the exchange rate. Meanwhile, inflation and interest rate variables only have an effect in the short term. The implications of the research show that increasing economic growth must be followed by increasing people's income and the stability of the rupiah exchange rate will increase people's deposits or savings in sharia banking.

Unleashing Fintech’s potential: A catalyst for green bonds issuance

Financial technology, also known as fintech, is transforming daily lives and revolutionising the financial industry. However, there is currently no consensus regarding the effect of fintech on the green bond market. Using novel Chinese data, this study provides robust evidence that fintech development can significantly boost green bond issuance. Further analysis suggests that this promotional effect occurs by empowering intermediary institutions and increasing social environmental awareness. Additionally, we investigate the heterogeneous effect and find that the positive relationship is more pronounced for bonds without high ratings and whose proceeds are not used for refinancing. This effect is also stronger for non-state-owned issuers and in cities connected with High-Speed Railway networks or located in the eastern region of China. These results call for attention from policymakers and security managers to take further notice of fintech utilisation in green finance products.

The Impact of Non-Muslim Community Perspectives on Islamic Banking in Jayapura, Papua, Indonesia

Islamic banks function as intermediary institutions governed by Sharia principles, catering to both Muslim and non-Muslim clientele. Operating within a Dual Banking System alongside conventional banks, Sharia-compliant banks engage in profit and loss sharing activities. The increasing clientele at Banks Syariah Papua encompasses not only Muslims but also a considerable number of non-Muslim customers. This study aims to examine the impact of location, product offerings, promotional activities on the inclination of nonMuslim individuals to patronize Banks Syariah Papua. The population studied is the non-Muslim population of Kecamatan Jayapura Utara, Papua Province. This study includes 123 samples from respondents. Research results indicate that location variable, product variable, and promotion variable have a significant impact on the attitudes of non-Muslim populations toward Bank Syariah Indonesia customer interest factors on the interest of non-Muslim customers to become customers at Banks Syariah Papua.

Financial Development of Savings and Credit Cooperatives of Ecuador and its Impact on Economic Growth

Savings and Credit Cooperatives constitute alternative financial intermediation institutions that promote inclusion. The purpose of this study is to estimate the incidence of financial development of the cooperative sector of segments 1, 2 and 3; evaluated in the period 2016-2022 in the economic growth of Ecuador, calculated through the Gross Domestic Product. The methodology used contemplates the panel data model under consideration of fixed effects. The results indicate a positive relationship between the volume of microcredit and the variation in GDP; while variables such as credit risk, investment volume and profitability have a negative impact on economic growth.

Are Financial Ratios Able to Predict Bank Stock Prices During the COVID-19 Pandemic?

Fundamental analysis, such as financial ratios, is important to ensure capital markets move efficiently. This analysis represents 69% of the variation in stock prices in the capital market. However, fundamental analysis has not been widely carried out because expertise is needed to analyze qualitative and quantitative data from company characteristics that underlie the movement of a stock. In 2020 – 2022, bank performance experienced fluctuations due to the Covid-19 pandemic which caused bank share prices to also fluctuate. On the other hand, banks have an important role as intermediary institutions or intermediaries to support the funding needs of the real sector or the business world. However, previous research on fundamental analysis largely excluded companies in the financial sector. Therefore, this article aims to find out whether financial ratios are able to predict bank share prices during the Covid-19 pandemic. There are five financial ratios used in this research, namely loan loss provision ratio, total capital ratio, profit margin ratio, current ratio, and solvency ratio. The population in this study are financial companies listed on the Indonesia Stock Exchange for the period 2020 - 2022. The sample was selected using a purposive sampling method and obtained 38 companies and 114 observations. The results of multiple regression analysis show that the loan loss provision ratio has a significant negative effect and the total capital ratio has a significant positive effect on bank share prices. Meanwhile, the net profit margin ratio, current ratio and solvency ratio do not have a significant effect on bank share prices. This research has implications for encouraging banks to improve disclosure policies and encouraging investors to hone fundamental analysis skills to reduce mispricing and make markets more efficient.

Unlocking the Potential of the Financial Intermediary System in Development Policy: A Focus on Regional Development

The purpose of this study is to shed light on the possibilities of higher-level development policy involvement of the financial intermediary institutional system, with particular regard to regional development. The investigation was primarily based on the analysis of the Hungarian financial intermediary system of refundable subsidies from the European Union that operated from 2007 through 2013. The reason for this is that, in terms of the diversity of the institutional system, both concerning the preceding and the 2014-2020 development cycle, this period had the highest diversity of institutions mediating subsidies, which plays a crucial role in the development of solutions that are more precisely suited to the financing needs of the final beneficiaries. After reviewing the available literature and development policy documents, I applied a research method based on a Delphi analysis. The investigation revealed a new finding: the market experience of the institutions' experts was the key factor in the successful placement of intermediary institutions' resources. This aspect had not been previously highlighted in evaluations or literature findings. In addition, the research pointed out, among other things, that for more optimal use of financial instruments for cohesion purposes, an integrated policy mix should be created at a higher level, including primarily the social and financial sectors, as well as the territorial development policy. All this would enable the introduction of combined support products at the implementation level, linking financial instruments with other non-financial types of support. For example, loan or guarantee products could be supplemented with consultancy, education, or mentoring support (especially concerning management, organization development, and strategic planning).

The impact of government microfinance program on poverty alleviation and job creation in a developing economy

Government initiatives to eradicate poverty in developing countries have included establishing microfinance programs to provide microloans and credit to the less privileged living in peri-urban and rural areas where commercial financial institutions are underrepresented. The study aims to investigate the effect of the South African Microfinance Apex Fund (SAMAF) on poverty alleviation and job creation. This case study targeted 103 beneficiary firms and self-employed individuals to send them questionnaires. The data analysis was primarily exploratory and descriptive. The findings show that the majority, 87%, agreed that the loans they accessed were sufficient for their business plans and needs. In addition, they were able to create at least one additional job after receiving the loan and improve their total business income on average compared to before the SAMAF loan. However, due to the risk of non-repayment of loans by recipients living in informal settlements, most microfinance intermediary institutions were unwilling to expand their operations into such settlements. SAMAF, on the other hand, has flaws, one of which is the slow delivery of funds to microfinance intermediary institutions, which needs to be addressed. The study concludes that to address the credit needs of semi-rural and rural residents, microfinance intermediary institutions must do more to expand into these areas and adopt a more aggressive and creative approach to the development of financial products and expand their access to include more of the poorest and most vulnerable households.

Assessment of the Impact of Financial Intermediation on Gross Domestic Product in Nigeria from 1996 to 2022

This paper assesses financial intermediation in Nigeria and how it has impacted economic growth. The study sourced time series data between 1996 and 2022 from the Central Bank of Nigeria and utilized econometric techniques using Ordinary least square regression, Error correction model, and Pairwise Causality to assess the impact of the financial intermediation institutions on the growth of the nation's Gross Domestic Product. The paper focused on banks, capital markets, and the insurance industry being significant institutions in the financial system. The GDP is the dependent variable, while Credit to the Private Sector as a percentage of GDP (CPS/GDP) and Total Savings as a percentage of GDP (TS/GDP) were used as proxies for assessing banks' contributions to economic growth. Stock market capitalization was used as a proxy for the contribution of the capital market to economic growth, and Insurance industry assets were used as a proxy for the insurance industry's contribution to economic growth. The study revealed no co-integration and long-term relationship between economic growth and the financial intermediation variables. There was, however, a unidirectional causal relationship between economic growth and the banks and the capital markets. There was no causality between economic growth and insurance. We recommend that policymakers undertake periodic reforms to deepen the capacity of the institutions to support de-risking and funding small and medium enterprises and the agricultural value chain, which are vital channels for diversifying the economy. The regulatory authorities are pivotal in upscaling the institutions' contribution to economic development.

Analysis of Non-Performing Loans and Loan to Deposit Ratio

Banks are trusted financial institutions that function as intermediary institutions, helping the payment system run smoothly and, no less important, as institutions that are a means of implementing government policies, namely monetary policy. This research aims to determine and analyze the level of bank health using the Non-Performing Loan and Loan to Deposit Ratio methods at PT. Bank Rakyat Indonesia (Persero) Tbk 2019-2022. The type of research used is descriptive research with a quantitative approach. The variables and measurements used in this research consist of Non-Performing Loans (NPL) and Loan to Deposit Ratio (LDR). The results of this research show that for 4 periods, starting from 2019 to 2022, the findings were that the results of the bank's health level in terms of the Non-Performing Loan (NPL) ratio and Loan to Deposit Ratio (LDR) were overall healthy.

Construction of China’s Carbon Financial Accounting System from the Perspective of Sustainable Development

Carbon Financial Accounting System highlights the importance of carbon finance and carbon accounting in China's efforts towards sustainable development and reducing its carbon footprint. The article discusses the need to manage and trade carbon assets, develop a comprehensive carbon financing system, and account for and report carbon activities. It proposes constructing a carbon accounting framework that includes all key sources of carbon emissions and carbon sequestration capacity. The article emphasizes the need to integrate carbon accounting into a company's operations and establish a comprehensive carbon finance ecosystem as a critical component of national strategic development. To achieve this, the Chinese government must promote CDM initiatives and relevant policies, enhance support to intermediary institutions, centralize the management of CDM projects, and strengthen carbon financing regulations. The article suggests establishing carbon trading and pricing mechanisms and improving the carbon trading system to create an effective carbon finance regulatory structure. Additionally, a carbon accounting system is required for financial and accounting oversight to support green and low-carbon growth, hence strengthening carbon accounting and reporting regulations of companies. The incorporation of carbon exchange, carbon funds, and carbon sinks banks are also essential in enhancing the financial accounting system.

Determinan Penyaluran Kredit pada Bank Perkreditan Rakyat di Sulawesi Utara

The role of banking as an intermediation institution is very important in supporting the running of the economy and national development, considering its function as an organizer of payment transactions, an intermediary between debtors and creditors, and so on. The main focus and activity of banking in carrying out its intermediation function is credit distribution. This research is motivated by the existence of a gap phenomenon where the credit distributed by Rural Banks in North Sulawesi is not yet optimal. Thus, it is necessary to examine the factors that influence credit distribution, some of which are Third Party Fund (TPF) and Non-Performing Loan (NPL). The aim of this research is to find out the influence of Third Party Fund and Non-Performing Loan on credit distribution at Rural Banks in North Sulawesi. The analysis technique used in this research is multiple linear regression with the Ordinary Least Square (OLS) method. The results show that Third Party Fund and Non-Performing Loan have a positive and significant effect on credit distribution. Based on the results, it is hoped that Rural Banks can further increase Third Party Fund and minimize the occurrence of Non-Performing Loan in order to increase credit distribution at Rural Banks in North Sulawesi.

The Value Relevance of Earnings and Book Values: A Case from Financial Institutions in Indonesia

Purpose: This study aims to assess the field of the accounting value relevance of earnings and book value on stock prices of banks and financial institutions listed in the Indonesia Stock Exchange. Methodology: Using a sample of available banks and financial institutions listed in the Indonesia Stock Exchange from 2014 to 2021, this paper accommodates the documented accounting information in an emerging market context by using stock price of four months after year-end as a dependent variable. This study used the panel data regression technique on 31 banks and 36 others financial institution during the study period. Findings: This research find that earnings and book value are statistically significant associated with firm stock price. Also, using these variables together is positively related to the firm stock price. Comparatively between banks and financial institutions, these obtain evidence that earnings per share is statistically more value-relevant than book value. Novelty: This research used the financial sector, both banking and other financial institutions, because both types of institutions are intermediary institutions that greatly influence a country's economy.

REGULATION, SUPERVISION, AND IMPLEMENTATION OF SHARIA PRINCIPLES IN BANKING BY OJK (ANALYSIS OF LEGAL ASPECTS AND CHALLENGES)

Banking institutions play an important role in the economic development of the country. Banks are intermediary institutions that cannot be separated from people's lives. Sharia banking is part of the existing banking system in Indonesia which has its own challenges in implementing sharia principles and maintaining its stability. Prior to the establishment of OJK (Financial Services Authority), Bank Indonesia had full authority in supervising the financial services industry, including banking. The Financial Services Authority was established as an answer to problems that arose in the banking sector after the crisis in several national banks. The OJK Law which came into force on November 22, 2011 authorizes OJK to conduct supervision, regulation and investigation in the banking sector in Indonesia. This study discusses the legal aspects of banking regulation and supervision as well as the implementation of sharia principles in OJK sharia banking. The research methods used are legal approaches and literature reviews. The results of the study show that OJK has an integrated regulatory and supervisory function in the entire financial services sector. OJK is considered a superior institution with great authority. OJK also plays a role in regulating and supervising Islamic banking

Efficiency Comparison between Conventional and Islamic Rural Banks in Sumatra during the COVID-19 Pandemic

This study aims to examine and compare the efficiency of conventional rural banks and Islamic rural banks in their roles as intermediary institutions during the COVID-19 pandemic in Sumatra, Indonesia. Furthermore, the efficiency determinants were further analysed to find some variables that affect rural banks’ efficiency. Non-Parametric approach, Data Envelopment Analysis (DEA), and Tobit Regression are employed in this study. The results show that Islamic rural banks have better efficiency performance compared to conventional rural banks, but that there is a fluctuating efficiency trend experienced by both types of rural banks during the observation period. In addition, the potential improvement result indicates that financing and operating revenue variables are the main causes of rural bank inefficiency. Furthermore, the Tobit Regression result finds that capital and bank size significantly improve the efficiency level, but that risk significantly reduces bank efficiency.