The Effect of Islamic Banking on the Welfare of Indonesian Society

  • Muhammad Amin
  • Abdul Muta’ali
  • Muhammad Cholil Nafis


Islamic Banking in Indonesia is continuously showing rapid development. As of February 2020, the number of Islamic banking in Indonesia has reached 14 Islamic Commercial Banks (BUS), 20 Islamic Business Units (UUS), and 164 Islamic Rural Credit Banks (BPRS). However, the question is how far Islamic banking capable of contributing to society’s welfare? Therefore, the purpose of this study is to find out how the role of Islamic banking is on society’s welfare in Indonesia. The method used in this research is panel data regression using the fixed effect model. The results show that Islamic banking variables have a positive and significant effect on society’s welfare. In other words, the results of the study indicate that the existence of Islamic banking in Indonesia has a positive impact on society’s welfare.


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How to Cite
AMIN, Muhammad; MUTA’ALI, Abdul; NAFIS, Muhammad Cholil. The Effect of Islamic Banking on the Welfare of Indonesian Society. International Journal of Advanced Research in Economics and Finance, [S.l.], v. 2, n. 2, p. 79-86, july 2020. ISSN 2682-812X. Available at: <>. Date accessed: 11 aug. 2020.