Journal of Accounting, Finance, and FinTech Advancements

Analysis of the Role of Increasing Financial Inclusion Through Digital Transformation on the Stability of the Financial System in Indonesia

2025-05-19T04:58:39+00:00

The increase in financial inclusion in a country can affect the stability of financial system because it can maintain the stability of banking operations and reduce inequality in financial access in society. The increase in financial access caused by the emergence of digital financial products, such as transaction systems using e-money and QRIS financial transactions, has succeeded in reducing inequality in access to financial services in society. The advantages provided by digital transactions have disadvantages, namely regarding the guarantee and security of digital financial transactions which do not yet have regulations from the government. Hence, it is imperative to conduct a more thorough examination of how the expansion of financial products via digital transactions impacts the stability of Indonesia's financial system. The approach utilised in this research is the Autoregressive Distributed Lag (ARDL) methodology utilising data from the years 2021 to 2023. The factors assessed in this study encompass e-money and QRIS, alongside supplementary variables such as online loans, credit cards, and debit cards. Furthermore, a key variable under consideration is the Non Performing Loan (NPL) which serves as a gauge for financial system stability. The study results revealed that debit cards do not greatly impact the stability of the financial system, whether in the short or long run. Conversely, credit cards have a notable positive influence on financial system stability in the short term but do not have a lasting impact. On the contrary, e-money is found to have a considerable detrimental impact on financial system stability, both in the short term and long term. Similarly, QRIS is shown to have a significant positive effect on financial system stability in the short term but lacks significance in the long run. Online loans, on the other hand, have a substantial negative impact on financial system stability in the short term but are not significant in the long run.

Financing Mix Decision and Firm Performance Optimality: Evidence from the Nigerian Oil and Gas Industry

2025-06-02T03:29:22+00:00

This study examined the effect of financing mix decision on firm performance optimality with evidence from the Nigerian oil and gas industry from 2014 to 2023. The study decomposed financing mix decisions into Debt-to-equity Ratio (DER), Debt Ratio (DTR), Capitalization Ratio (CAR), and Interest Coverage Ratio (ICR). These formed the independent variables. The dependent variable is financial performance operationalized as return on equity (ROE). The study adopted the ex-post facto design because it facilitates the investigation of how regressors, prior to the study, affect regressed. The study population is confined to the 9 listed sampled firms in the Nigerian exchange group as at 31st December, 2024. The Robust Least Square estimation technique was used to test the research hypothesis. The study confirmed that Debt-to-equity Ratio (DER), Debt Ratio (DTR), and Interest Coverage Ratio (ICR) have positive significant effect on firm performance optimality while Capitalization Ratio (CAR) has a negative significant effect on firm performance optimality. The study concludes that equity and debt optimality enhances profitability. Overall, the study emphasized the need for an optimal financial structure in enhancing firm profitability. Hence, the paper submits that the sampled firms need to balance debt financing to tax benefits while minimizing financial distress risks. This study provides empirical evidence on the optimal mix of equity and debt financing for enhanced firm profitability.

Implementation of Baitul Maal Wat Tamkwil (BMT) in Efforts to Get Economic Growth in Indonesia

2025-05-21T09:02:26+00:00

This study is intended to explain the implementation of baitul maal tamwil (BMT) in efforts for economic growth in Indonesia. This study adopts a library research methodology. Library research involves gathering information and data using a variety of materials available in libraries such as documents, books, magazines, and historical accounts. Baitul Maal wat Tamwil (BMT) is a self-sustaining business that follows the principles of Bayt Al-Maal Wa At-Tamwil by executing strategies to enhance productive business ventures and investments to uplift the quality of small and medium enterprises through promoting savings and boosting financing in their economic pursuits. BMT can be formulated as a Community Self-Help Group (KSM) or a cooperative. When established within a KSM structure, BMT will be granted operational certification by the Small Business Incubation Center (PINBUK), endorsed by Bank Indonesia (BI) as the primary non-governmental organization overseeing KSM implementation as outlined in Law no. 17 of 2013 regarding Community Organizations.

Internal and External Factors Affecting Profitability in Private Banking for the Period 2019-2023

2025-05-21T09:02:55+00:00

This research investigates how both internal and external elements impact the financial success of private banks that are publicly traded on the Indonesia Stock Exchange from 2019 to 2023. Factors within the banks such as Capital Adequacy Ratio (CAR) and Non-Performing Loans (NPL) will be analysed, along with external factors like inflation and the benchmark interest rate (BI Rate). Return on Assets (ROA) is a key indicator of banks' efficiency in terms of using their assets to make a profit. In this study, panel data regression analysis was used to analyse data from official financial reports. The results show that Capital Adequacy Ratio (CAR) has a positive impact on ROA, while Non-Performing Loans (NPL) have a negative impact. Interestingly, factors like inflation and the Bank Indonesia (BI) Rate do not seem to have a significant effect on ROA. This research distinguishes itself by focusing on how these variables interact within the unique environment of private banking in Indonesia. The study proposes various strategies to improve profitability, including better management of credit risks and capital adequacy.

The Determinants of Financial Distress in the Pre Covid-19 Era in Nigeria

2025-07-24T09:04:34+00:00

The research investigated the factors influencing financial trouble in Nigeria before the outbreak of COVID-19. The main focus of the study was on financial instability, which was measured using the Altman Z-score. Various factors contributing to financial distress, such as profitability, loan loss provision, liquidity ratio, asset quality, and capital adequacy ratio, were taken into consideration as explanatory variables. Data from the Central Bank of Nigeria's statistical bulletin and the Nigerian Deposit Insurance Corporation's annual report from the years 1992 to 2022 were collected for analysis. The data was then examined using various techniques such as descriptive analysis, correlation analysis, and granger causality test. The E-view software package was utilized to assess the relationship between the explanatory and explained variables in the study. The result shows that profitability (ROCE), loan loss provision (LLP) and liquidity ratio (LIR) are negatively correlated with Altman Z-score and that such relationship is moderate and Asset quality ratio (ASQ) and Capital adequacy (CAR) are positively correlated with Altman Z-score. The study recommended that beyond thinking of profitability, the bank should imbibe efficient and effective management team that will reduce the environmental shocks that affects performance of the Nigerian banking industry. Furthermore, there is need for regulators of the Nigerian banking industry to reexamine the rising of non-performing loans (NPL) occasioned by inability of the deficit economic unit to service their loans.