Is the Degree of Competition Weaken the Impact of Growth Towards Net-Profit-and-Loss Sharing Margin?: Study of Indonesian Islamic Microfinance Institutions

摘要

The purpose of this study is to examine the impact of Microfinance Institutions (MFIs) growth and degree of competition towards Net-profit-and-loss sharing margins (NPLS) and examine whether the degree of competition can weaken the impact of MFIs growth on NPLS. The data collected fromOtoritas Jasa Keuangan (OJK) database from 2011–2016 and conducted on Indonesian Islamic MFIs. The final sample used in this study consists of a total of 2160 observations. This study uses panel data regression model analysis to analyze the obtained data. The results showed that MFIsgrowth has a positive impact on NPLS. On the other hand, there is no evidence that HHI, which is the proxy of the degree of competition, could explain NPLS. It is already known that islamic microfinance sector also facing a rapid growth in terms of the number of institutions and the numberof customers and therefore affecting the vast growth from islamic MFIs operation itself. The result of this study proved that rapid growth which happen in Indonesia MFIs is really give the MFIs ability to generate more net profits margin. There is no evidence that the degree of competitioncould weaken the impact of MFIs growth on NPLS.