An Overview of Islamic Bank Financing to Infrastructure Contractor in Indonesia

  • Mohamad Torik Langlang Buana
  • Nuradli Ridzwan Shah Mohd Dali

Abstract

Financing to the construction segment from Islamic banks in Indonesia for one decade had been always at a low level compared to loans from conventional banks. Infrastructure construction in Indonesia for one decade from 2010 to 2020 is predisposed by unordinary policies and conditions. In the year 2017, there had been a significant change in the infrastructure budget, by end of the decade in the year 2020, there was a pandemic happened that made some segments of business stopped, but not to the infrastructure construction sector and the banking sector. The number of contractors and the change of budget in the infrastructure construction segment had not yet followed by the opportunity for Islamic banks in financing the sector.  The objective of the study is to discuss some aspects that relate to Islamic bank financing to the construction sector. The research using a qualitative method by observation on secondary data that are available publicly which are related to financing and infrastructure construction. The study revealed that it is not much different on the cost of financing from both Islamic and conventional banks, and the study exposed that there were higher on the level of nonperforming financing in construction segment of Islamic banking.

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Published
2021-10-01
How to Cite
LANGLANG BUANA, Mohamad Torik; MOHD DALI, Nuradli Ridzwan Shah. An Overview of Islamic Bank Financing to Infrastructure Contractor in Indonesia. International Journal of Advanced Research in Economics and Finance, [S.l.], v. 3, n. 3, p. 114-125, oct. 2021. ISSN 2682-812X. Available at: <https://myjms.mohe.gov.my/index.php/ijaref/article/view/15705>. Date accessed: 20 may 2024.
Section
English Section