FACTORS INFLUENCING ISLAMIC RURAL BANKS’ THIRD PARTY FUND IN INDONESIA

Abstract

In the recent years, Islamic rural bank is growing in Indonesia. The main source of capital from this bank is third party fund. Third party fund is important for the continuation of the Islamic rural bank and the increasing of total third party fund is a must. However based on Islamic banking statistic of Bank Indonesia (2016), there was a decrease in the growth and actual value from total third party fund in Islamic rural bank. The purpose of this research is to analyze the factors influencing Islamic rural banks’ third party fund in Indonesia period 2010-2015. Analysis is done using the Statistical Package for Social Science 20 (SPSS 20). The multiple regression linear method is used in determining the significance influence variables to dependent variable. The secondary time series data are gathered from monthly Islamic banking statistic of Otoritas Jasa Keuangan, Bank Indonesia, and Badan Pusat Statistik from 2010 until 2015. Based on statistical analysis it is discovered that there are three variables namely Profit Sharing, Financing to Deposit Ratio, and BI Rate have significant influence on Third Party Fund in Islamic rural banks while Inflation has no significant influence on Third Party Fund. Simultaneously, the variation of four independent variables can explain 69.6% of the variation Third Party Fund. The Profit Sharing partially has the most significant influence.