Presenters: Bunga Pertiwi, Devi Narulitasari
Affiliation: UIN Raden Mas Said Surakarta
Room: 7
ICIES News- At the 4th Islamic Economics Studies (ICIES) Conference 2024, held in Room 7, researchers Bunga Pertiwi and Devi Narulitasari from UIN Raden Mas Said Surakarta presented their pioneering study titled “The Impact of Zakat Distribution on the Financial Performance of Islamic Commercial Banks in Indonesia.”
Their research addresses a significant gap in the current CSR disclosure practices of Sharia Commercial Banks (SCBs) in Indonesia. The presenters argue that the existing CSR frameworks do not adequately incorporate Sharia principles, leading to an incomplete representation of these banks’ social responsibility efforts. They propose using zakat contributions as a more fitting proxy for CSR in the context of Sharia banking.
The study spans a decade, from 2013 to 2023, and analyzes financial reports of Sharia banks registered with the Otoritas Jasa Keuangan (OJK). Using a sample of 30 banks selected through purposive sampling, the researchers employed multiple linear regression analysis via Eviews 12 to investigate the relationship between zakat and financial performance, specifically focusing on Return On Assets (ROA) and Return On Equity (ROE).
Their findings reveal a nuanced impact of zakat on the financial performance of these banks. While zakat contributions positively influence ROE, they do not have a significant effect on ROA. This distinction highlights the complex dynamics of financial metrics in the Sharia banking sector and underscores the importance of integrating Sharia-compliant CSR indicators for a more accurate assessment of financial performance.
The presentation by Pertiwi and Narulitasari has sparked considerable interest and discussion among conference attendees, emphasizing the need for a reevaluation of CSR practices in Islamic finance. Their work not only contributes to academic discourse but also offers practical implications for policymakers and financial institutions striving to align with Sharia principles while enhancing their financial performance.