Browsing by Author "Fatwa Wijaya, Ibrahim"

Now showing 1 - 2 of 2
  • Thumbnail Image
    ItemOpen Access
    Does religiosity affect financing activity? Evidence from Indonesia
    (Wiley, 2022-11-27) Fatwa Wijaya, Ibrahim; Moro, Andrea; Belghitar, Yacine
    We examine the role of religiosity on the financing activities in both Islamic and conventional banks in Indonesian provinces by using five different measures of religiosity: number of Islamic schools, hajj application, number of Islamic seminary schools, number of Mosques, and number of certified halal products. Based on regression analysis, the results show that both Islamic and conventional banks provide more financing in religious provinces. Religiosity also helps in reducing the volume of non-performing financing. Our the results are still qualitatively valid after taking into account endogeneity issue that emanates from omitted variables (i.e., unobservable beliefs, ideas, and attitudes), and possible reverse causality between religiosity and the total amount of financing at the province level.
  • Thumbnail Image
    ItemOpen Access
    Trustworthiness and margins in Islamic small business financing: evidence from Indonesia
    (Elsevier, 2022-11-01) Fatwa Wijaya, Ibrahim; Moro, Andrea
    The existing literature has shown that, in the context of conventional bank lending to small businesses, trust reduces interest rates. However, the literature has not discussed the role of trust in supporting financing decisions, that is, the margin charged to small business managers at Islamic banks. We select murabaha, the most popular financing product offered by Islamic banks, and examine the role of trust in reducing margins charged for murabaha. We surveyed Islamic bank managers and asked them about the perceived benevolence (habitualization) and perceived integrity (institutionalization) of small business managers with whom they are dealing. We found trust is negatively associated with the margins charged to small businesses. Our results are robust to endogeneity.