The Effect of the BI Rate on Total Islamic Bank Financing in Indonesia for the 2014-2020 Period with Third Party Funds (TPF) as Moderating Variables

Abstract

Indonesia's global sharia economic map growth can be seen in the Global Islamic Economy Indicator ranking. However, Islamic banks did not develop by the ideals of the scholars. Policymakers must prioritize the development of the Islamic finance industry to encourage economic growth. Banking as a financial institution that is very much needed by the community must be given full support so that small communities can quickly obtain capital. The purpose of this study is to examine the effect of the BI Rate on the total financing of Islamic Commercial Banks for 2014-2021, with TPF as a moderating variable. This study uses a quantitative method of secondary data from the BUS annual report published on the bank's official website during the 2014-2015 period. The data technique used in this study is a descriptive analysis of the classical assumption test. The results showed that the BI Rate did not significantly affect the total financing of Islamic commercial banks. In contrast, third-party funds with the total financing of Islamic commercial banks showed a significant relationship. Meanwhile, the influence of the BI Rate on Islamic commercial bank financing was moderated by third-party funds.