Encouraging Islamic Financing to Achieve SDGs through Poverty Alleviation
DOI:
https://doi.org/10.31436/jif.v8i2.357Keywords:
Financing, Islamic banking, SDGs, Poverty, Panel dataAbstract
Poverty is a challenge that must be encountered by every country in the world. Therefore, it is not surprising that poverty issues occupy the first goal out of the seventeen (17) goals in the Sustainable Development Goals or SDGs framework. Although, in general, the trend of poverty in Indonesia continues to decline, it turns out that the indication of a more acute poverty level is still difficult to be alleviated. The poverty index is reflected by the poverty severity index and poverty gap index. In this case, Islamic financing provides a more inclusive concept of poverty alleviation. The results of estimation by using panel data from 32 provinces from 2014 to 2018 in Indonesia reveal empirically that Islamic financing contributes to poverty alleviation programs through the financing of productive working capital. Hence, the financing made by Islamic banks are greatly supporting in achieving the SDGs’ Goal 1 i.e. towards having no poverty. However, the achievement of Islamic banks needs to be expanded to reach the lowest point of people that are experiencing poverty through financing and productive economic activities.
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References
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Aslam, M. N. (2014). Role of Islamic Microfinance in Poverty Alleviation in Pakistan: An Empirical Approach. International Journal on Academic Research in Accounting, Finance, and Management Sciences, 4(4), 143–152.
Babatunde, A., & Olasunkanm, A. (2014). Alternative Financial Inclusion Strategy : Islamic Expectations From Ogun Sub National Government, Nigeria. Singaporean Journal of Business Economics and Management Studies, 2(11), 169 180.
Dhaoui, I. (2018). The role of Islamic Microfinance in Poverty Alleviation: Lessons from Bangladesh Experience. Munich Personal RePEc Archive, (87358).
Dusuki, A. W. (2008). Banking for The Poor: The Role of Islamic Banking in Microfinance Initiatives. Humanomics, 24(1),
Donou-Adonsou, F., Sylwester, K. (2016). Financial Development and Poverty Reduction in Developing Countries: New evidence from banks and Microfinance institutions. Review of Development Finance, 6, 82-90.
Fianto, B. A., Gan, C., Roudaki, J. (2018). Equity Financing and Debt-Based Financing: Evidence from Islamic Microfinance Institutions in Indonesia. Pacific-Basin Finance Journal, 52, 163-172.
Gujarati, D & Porter, Dawn C. (2008). Basic Econometrics. fifth edition. New York: McGraw-Hill International Edition.
Hanna, S., Manap, A., Siththi, F., & Long, S. (2017). Poverty Alleviation via Microfinance using the Concept of Mudharabah. International Journal of Management and Applied Research, 4(3).
Imai, K. S., Arun, T., Annim, S. K. (2010). Microfinance and Household Poverty Reduction: New Evidence from India. World Development, 38(12), 1760-1774.
Irjayanti, M., & Mulyono, A. (2012). Barrier Factors and Potential Solutions for Indonesian SMEs. Procedia Economics and Finance, 4(Icsmed), 3–12.
Khandker, S. R. (2005). Microfinance and Poverty: Evidence Using Panel Data from Bangladesh. The World Bank Economic Review, 19(2), 263-286.
Litriani, E., & Leviana, L. (2017). Pengaruh Pembiayaan Modal Kerja Terhadap Pendapatan Usaha Nasabah Pada PT. Bank Syariah Mandiri Kantor Cabang Simpang Patal Palembang. I-Finance, 3(2), 123–140.
Masyita, D., & Ahmed, H. (2013). Why is Growth of Islamic Microfinance Lower than its Conventional Counterparts in Indonesia? Islamic Economic Studies, 21(1), 35–62.
Miled, K. B. H., Rejeb, J. E. B. (2015). Microfinance and Poverty Reduction: A Review and Synthesis of Empirical Evidence. Proceedia-Social and Behavioral Sciences, 195, 705-712.
Onakoya & Babatunde, A. (2014). Alternative Financial Inclusion Strategy : Islamic Expectations from OGun Sub-National Government, 2(11), 169–180.
Rewilak, J. (2017). The Role of Financial Development in Poverty Reduction. Review of Development Finance, 7,169-176.
Rijawanti, N. I., Asutay, M. (2015). The Role of Islamic Microfinance Institutions in Economic Development in Indonesia: A Comparative Analytical Empirical Study on Pre- and Post-Financing States.
In H A El-Karanshawy et al. (Eds), Access to Finance and Human Development. Essays on Zakah, Awqaf, and Microfinance. Doha, Qatar: Bloomsbury Qatar Foundation.
Riwajanti, N. I. (2013). Islamic Microfinance as an Alternative for Poverty Alleviation: A Survey. Afro Eurasian Studies, 2, 254–271.
Rokhman, W. (2016). The Effect of Islamic Microfinance on Poverty Alleviation: Study in Indonesia. Economic Review, XI(2).
Sabiti, M. B., & Effendi, J. (2017). Islamic Micro Finance and Its Impact on Poverty Reduction of Two Village Models in Bogor, Indonesia. Signifikan: Jurnal Ilmu Ekonomi, 6(1), 87–102.
Sirageldin, I. (2000). Elimination of Poverty: Challenges and Islamic Strategies. Islamic Economic Studies, 8(1), 1–16.
Suzuki, Y., Pramono, S., & Rufidah. (2016). Islamic Microfinance and Poverty Alleviation Program: Preliminary Research from Indonesia. SHARE, 5.
Wajdi Dusuki, A. (2008). Banking for the poor: The role of Islamic banking in microfinance initiatives. Humanomics, 24(1), 49–66.
Wooldridge, J. M. (2009). Introductory Econometrics: A Modern Approach. USA: South –Western Cengage Learning.
Wooldridge, Jefry M. 2013. Introductory Econometics: A Modern Approach. 5th Edition. Amerika Serikat: South-Western Cencage Learning.
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Published
2019-11-28
How to Cite
Achmad Rifa’i, Ayu, P., & Listiono. (2019). Encouraging Islamic Financing to Achieve SDGs through Poverty Alleviation. Journal of Islamic Finance, 8(2), 10–20. https://doi.org/10.31436/jif.v8i2.357
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