Role of Financial Inclusion to Stability: The Case of Indonesia’s Sharia Banking

Abstract

Public access to the services of financial institutions determines the revenues amount of financial institutions. The growth of bank account helps banks to manage the financing service that provides for the community. This study examines the relationship of financial inclusion and financial stability, especially in Indonesia’s Sharia banking. Financial inclusion defined as community access to financial services which peroxided by deposits, while the financial stability of Sharia banking is measured by Non Performing Financial (NPF). Samples include financial data of 5 sharia banks during the study period from 2011 to 2016 were analyzed using classical assumption test and regression test. The results of study found that the deposits as proxy of financial inclusion had a positive effect to stability of financial.

Keywords

• financial inclusion
• financial stability
• sharia banking
• g20