Capitalization Moderates the Role of Statutory Reserve Requirement and Macroprudential Intermediation Ratio on Sharia Financing

Yudi Yudi

doi:10.59261/jbt.v7i4.797

Authors

Yudi Yudi Universitas Bina Sarana Informatika

DOI:

https://doi.org/10.59261/jbt.v7i4.797

Keywords:

Capitalization, Macroprudential Intermediation, Statutory Reserve Requirement, Sharia Financing

Abstract

Background: Excessive credit increases access to the financial sector anad can create financial sector vulnerabilities through prudent credit standards and excessive credit growth. The Statutory Reserve Requirement and Macroprudential Intermediation Ratio are implemented to mitigate vulnerabilities within the financial sector by promoting prudent lending practices and limiting excessive credit expansion, which could otherwise contribute to economic instability.

Objective: This is to show effect of statutory reserve requirement and macroprudential intermediation ratio on sharia financing, moderated by capitalization.

Methods: It employs a regression analysis using the 2SLS method. The sample consists of 120 observations sourced from the OJK covering the period from 2016 to 2025.

Results: The results demonstrate a positive effect of the macroprudential intermediation ratio on Sharia financing, whereas the statutory reserve requirement shows no significant effect. Capitalization influences Sharia financing; when interacted with the macroprudential intermediation ratio, it is shown to strengthen the relationship—a phenomenon termed "quasi-moderation." Conversely, when capitalization is interacted with the statutory reserve requirement, it does not strengthen the relationship—a case of "predictor moderation." Macroprudential intermediation ratio is the variable that has the biggest effect on sharia financing.

Conclusion: The study offers original insights for regulators and practitioners regarding the role of capitalization in amplifying the effect of the macroprudential intermediation ratio on financing.

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