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Effectiveness Financing in Agriculture Sector: A Comparative Study between Conventional and Islamic Bank

Author

Listed:
  • Inten Meutia

    (Department of Accounting, University Sriwijaya, Faculty of Economics, Indonesia.)

  • Mohamad Adam

    (Department of Management, Faculty of Economics, University Sriwijaya, Indonesia)

Abstract

This study aims to identify the effectiveness of financing provided by conventional and Islamic banks to Micro Small Medium Enterprises in the agricultural sector in South Sumatra. The study uses multiple linear regressions to identify the effect of financing on productivity. Musi Banyuasin Regency was chosen as a research location because based on data from Bank Indonesia 2016 is the district that has the largest loan for agricultural / plantation SME sector in South Sumatera. A total of 128 farmers were sampled in this study. Research respondents are farmers who have been or are getting loans either from conventional banks or from Islamic banks. This study found that neither simultaneous nor partial types of banks and loan amounts were not proven to significantly affect productivity. These findings indicate that the behavior of Islamic and conventional banks in disbursing loans to the agricultural sector is no different.

Suggested Citation

  • Inten Meutia & Mohamad Adam, 2019. "Effectiveness Financing in Agriculture Sector: A Comparative Study between Conventional and Islamic Bank," International Journal of Economics and Financial Issues, Econjournals, vol. 9(1), pages 23-30.
    • Handle: RePEc:eco:journ1:2019-01-4
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Agricultural Financing; Islamic Bank; Conventional Bank;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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