| Penulis/Author |
Annisa Fithria (1); Mahfud Sholihin, Prof., Ph.D., Ak., CA., CPA (Aust) (2) ; Usman Arief, S.E., M.S.M. (3); ARIF ANINDITA (4) |
| Abstrak/Abstract |
Purpose – This study aims to analyse the relationship between management ownership and the performance of Islamic microfinance institutions (MFIs) using panel data from Indonesian Islamic rural banks (Bank Pembiayaan Rakyat Syariah-BPRS).
Design/methodology/approach – This study uses unbalanced quarterly panel data from BPRS during the period from 2011 to 2016. Performance, as the dependent variable in this study, is analysed based on three sets of measures, namely profitability, efficiency, and the financing risk. Management ownership, as the independent variable in this study, is represented by ownership by the board of directors (BOD), the board of commissioners (BOC) and the sharia supervisory boards (SSB).
Findings – The results show that ownership by the BOD and BOC does not have a significant relationship with profitability and efficiency. However, the BOD has a negative relationship with the financing risk and vice versa for the BOC. Additionally, the study reveals that ownership by the SSB plays a positive and significant role in increasing the profitability and efficiency, but does not have a significant impact on the financing risk.
Contribution to knowledge/literature – By examining the relationship between management ownership and the performance of BPRS, this study fills a gap in the literature about Islamic microfinance institutions in Indonesia, especially the BPRS. This research also provides an insight into corporate governance practices and Islamic MFIs’ performance using BPRS data, as an example of a type of fully commercialised microfinance institution. The findings provide useful information for policy makers and regulators.
Originality/value – This is one of the first studies to provide empirical results regarding the relationship between management (BOD, BOC, and SSB) ownership and the performance of BPRS. The finding reveals that ownership by the SSB is very important to increase the profitability and efficiency of the BPRS.
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