Analysis of Revenue Sharing and Liquidity for Total Profit Sharing

Financing with BI Rate as a Moderation in Indonesia Sharia

Commercial Bank and Sharia Business Unit

Farhadi Arifiansyah

, Ari Prasetyo

and Gancar Candra Premananto

Postgraduated School, Universitas Airlangga, Surabaya, Indonesia

Faculty of Economics and Business, Universitas Airlangga, Surabaya, Indonesia

Keywords: Revenue sharing, Liquidity, Profit Sharing Financing, BI Rate

Abstract: Sharia banking is a banking system based on Al-Qur'an and Al-Hadist. Islamic banks do not use interest,

because the interest contains a riba. Indonesia has a dual banking system that uses bank interest and

equivalent rate. From the dual banking system, sharia banking uses interest rates as the objective to

determine the revenue rate and financing equivalent rate to maintain power between sharia banks and

conventional banks. This research uses quantitative methods, by using secondary data from the financial

statements of Sharia Commercial Bank and Sharia Business Unit issued by OJK and Bank Indonesia interest

rate report which was issued by Bank Indonesia for 2013-2017. This research uses a Moderated Regression

Analysis technique with dependent variable of total profit sharing financing, revenue sharing and liquidity

as independent variables and BI Rate as moderation variable. The results of this study show revenue sharing

for total profit sharing financing is negative significant. While liquidity has positive and significant to total

financing. And BI Rate as moderate has the positive and significant relationship between revenue sharing of

total profit sharing financing. BI Rate as moderate has the negative and significant relationship between

liquidity and total profit sharing financing.

1 INTRODUCTION

Syariah banking is basically a banking system

business based on Al-Qur'an and Al-Hadist. Islamic

banks themselves operate not on the basis of interest,

as commonly done by conventional banks because

interest contains elements of usury that is prohibited

in the Qur'an. In Indonesia there is a dual banking

system that makes bank interest and margin

unidirectional but not the same.

Previous research by Faisal (2013) studied the

effect of equivalent rate to mudharabah financing at

PT BRI Medan. The results show that the ratio has a

weak influence on financing at PT BRI Medan, as

well as Hidayat (2014) the effect of equivalent rate

on mudharabah financing distribution and the impact

on profit and social welfare distribution. The results

of this study indicate that equivalent rate has a

negative effect on distribution of mudharabah

financing by 91.65%, the distribution of mudrahabah

financing has a positive effect on earnings of

0,000635 and the distribution of mudrahabah

financing has a positive effect on welfare equity

(this index) of 3.2.

While for Ridha (2008), influence of liquidity

and profitability on financing at Bank Mandiri

Syariah Purwakarta, the results showed that every

change in the level of liquidity and profitability

would increase the financing funds distributed by

BSM. And for Agustin (2016) and the effect of

liquidity and profitability on sharia financing in

commercial banks in Indonesia, the results of this

study indicate that liquidity affects the financing of

Islamic commercial banks. Also, profitability

significantly affects the amount of financing issued

by Islamic commercial banks. But the variables of

profitability and liquidity have no effect

simultaneously on the financing of General Islamic

Banking in Indonesia.

This previous research shows how liquidity and

equivalent rates affect the total financing, but

Indonesia uses a dual banking system that makes the

BI Rate as one of the references for taking profits in

some Islamic banks. The level of revenue sharing

Ariﬁansyah, F., Prasetyo, A. and Premananto, G.

Analysis of Revenue Sharing and Liquidity for Total Proﬁt Sharing Financing with BI Rate as a Moderation in Indonesia Sharia Commercial Bank and Sharia Bussiness Unit.

DOI: 10.5220/0007538000890092

In Proceedings of the 2nd International Conference Postgraduate School (ICPS 2018), pages 89-92

ISBN: 978-989-758-348-3

and financing margin is to maintain competitiveness

between sharia banks and conventional banks. It is

true that BI Rate can intervene in liquidity and the

equivalent rate on total financing. So the researcher

is interested to test the level of influence of liquidity,

revenue sharing with BI Rate as moderation in total

financing at profit sharing of syariah banks, that is

mudharabah and musyarakah at Syariah Commercial

Bank and Sharia Business Unit in Indonesia.

2 LITERATURE STUDY

2.1 Revenue Sharing Theory

Revenue sharing is profit-sharing principle set forth

in a partnership, the share of revenue sharingis

determined at the time of the contract of

cooperation. If a business makes a profit, then the

profit share is done according to the agreement, if

the profit-sharing loss is adjusted to the capital

contribution of each party (Ascarya, 2006).

According to Rivai and Arifin (2010), in

calculate revenue sharing ratio the bank set a spread

of 2.4613% calculated from the expected profit

desired by the bank. The projection can be

quantified by calculating how much profit is

estimated by the average number of outstanding

loans in a month.

2.2 Liquidity Theory

Liquidity is a bank's management capability in

providing sufficient funds to meet its obligations at

all times. As we know, the importance of liquidity

can affect public confidence. According to Rivai and

Arifin (2010), managing liquidity will always be a

conflict of interest between the decision to maintain

liquidity and increase revenue.

The liquidity variable is proxied by a

precautionary liquidity which is the combined ratio

between cash, current accounts with central banks

and commercial banks against assets (Wuryandani et

al., 2014).

2.3 Bank Indonesia Interest Rate

Theory

BI Rate is a policy rate reflecting the stance of

monetary policy stipulated by Indonesian banks and

announced to the public. The operational targets of

monetary policy are reflected in the development of

the Overnight Interbank Money Market Rate (PUAB

O/N). The movement in the interbank money market

rate is expected to be followed by developments in

deposit rates, and in turn bank lending rates (source:

www.bi.go.id).

3 RESEARCH METHODOLOGY

3.1 Research Methods and Data

Collection

The research used a quantitative method, by using

quarterly secondary data from financial statements

of Sharia Commercial Bank and Sharia Business

Unit issued by OJK concerning Sharia Bank and

Bank Indonesia Interest Rate report published by

Bank Indonesia for 2013-2017 period.

3.2 Analysis Method

This research uses a Moderated Regression Analysis

(MRA) technique. The moderating variable is the

independent variable that will strengthen or weaken

the relationship between the other independent

variables to the dependent variable (Ghozali, 2011).

4 ANALYSIS OF RESEARCH

RESULTS

4.1 Coefficient of Determination (R2)

The test of coefficient of determination is used to

measure the ability of the model in explaining the

variation of the dependent variable where the

coefficient of determination ranges between zero

and one.

Table 1: Model Summary.

Model

Square

Adjusted

Square

Std. Error of

the Estimate

.885

.782

.757

16940.06619

a. Predictors: (Constant), RS. BI rate, revenue sharing,

liquidity, BI rate, liquidity

Source: Output Data SPSS

Based on the above table, it can be seen that the

magnitude of R Square is a value of 0.757. This

shows that 75% of total profit sharing financing

variables can be explained by the variation of the

ICPS 2018 - 2nd International Conference Postgraduate School

independent variables, while the remaining 25% is

explained by other causes outside the model. By

conclusion the model used is good enough.

4.2 Individual Parameter Significance

Test (t Test)

The t test statistic is used to show how far each

independent variable is influenced individually in

explaining its dependent variable (Ghozali, 2011).

Table 2: Coefficients

Model

Sig.

Std. Error

Beta

(Const

ant)

228643.

280

88030.2

2.597

.014

Reven

Sharin

48612.2

10988.3

-.688

-4.424

.000

Liquidi

10065.1

3821.46

2.363

2.634

.013

RS. BI

rate

5623.29

1384.78

1.062

4.061

.000

Liquidi

ty. BI

rate

1848.89

563.976

-2.509

-3.278

.025

a. Dependent Variable: total profit sharing financing

Source: Output Data SPSS

It can be seen that the variable revenue sharing

has a negative effect and is significant to total profit

sharing financing. Liquidity has a positive effect and

is not significant to total profit sharing financing.

While revenue sharing moderated by BI Rate has a

positive effect and is significant to total profit

sharing financing at Sharia Bank. And variable of

liquidity which is moderated by BI Rate has a

negative and significant effect on total profit sharing

financing generated by Sharia Bank. The results of

multiple linear regression equations can be written:

Total profit sharing financing = -228643.280 +

10065.109 liquidity - 48612.237 revenue sharing -

1848.894 liquidity BI rate + 5623.295 rs. BI rate.

5 DISCUSSION

5.1 Effect of Revenue Sharing for Total

Sharing Financing

The results of this study show revenue sharing for

total profit sharing financing in sharia banks and

Islamic business units have a negative and

significant impact. Agreeing with previous research

by Faisal (2013) results show that the ratio has a

weak influence on financing at PT BRI Medan.

Also, Hidayat’s (2014) results of this study indicate

that equivalent rate has a negative effect on

distribution of mudharabah financing.

5.2 Effect of Liquidity for Total

Sharing Financing

Based on the results of the research that has been

described previously, Ridha (2008), the results

showed that every change in the level of liquidity

and profitability would increase the financing funds

distributed by BSM. And in Agustin (2016) the

results of this study indicate that liquidity affects the

financing of Islamic commercial banks. This

research shows that the influence of liquidity to total

profit sharing for sharia commercial banks and

sharia business units has a positive and significant

influence. Liquidity has a positive significant effect

because more liquidity of banks will fund more

provided for total sharing financing.

5.3 Effect of Revenue Sharing for Total

Profit Sharing Financing with BI

rate as Moderation

Based on previous research revenue sharing has

weak influence on total profit sharing but such as the

theory that increasing BI Rate affects revenue

sharing for total profit sharing financing. This may

be due to fluctuations in the BI Rate affecting the

determination of revenue sharing and the total profit

sharing financing of the bank's share in the Sharia

Commercial Bank and Sharia Business Unit in

Indonesia in 2013-2017.

This should not happen because sharia banks are

different from conventional banks. If the profit-

taking decisions depend on interest, it can give the

impression that the sharia bank system is the same as

conventional banks, it would be better if sharia

banks and sharia business units implement owning a

sharia margin system.

5.4 Effect of Liquidity for Total Profit

Sharing with BI Rate as

Moderation

As previous research shows, liquidity has a positive

effect on total profit sharing financing. But in this

research the effect of liquidity to total profit sharing

Analysis of Revenue Sharing and Liquidity for Total Proﬁt Sharing Financing with BI Rate as a Moderation in Indonesia Sharia Commercial

Bank and Sharia Bussiness Unit

financing with BI Rate as a moderation has a

negative effect. Truly that sharia bank should not be

influenced by interest rate in managing liquidity to

total profit sharing financing.

6 CONCLUSION

Revenue sharing for total profit sharing financing is

negative significant. While liquidity is positive and

significant to total financing for the results. And BI

Rate as moderate has a positive and significant

relationship between revenue sharing for total profit

sharing financing. BI Rate moderates the negative

and significant relationship between liquidity and

total profit sharing financing.

It shows sharia banking still needs supervision

and innovation in transactions and performance to

make a better sharia banking system.

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