September 5, 2025Open Access

The impact of funding risk on the stability of Islamic rural banks in Indonesia

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Dynamic panel regression shows funding risk impacts stability in Islamic rural banks, highlighting capital needs.

Funding risk enhances stability, particularly for small Islamic rural banks, while larger banks show lesser effects.
Banks with high assets and capital adequacy ratios maintain better stability against risks and economic downturns.
Dynamic panel regression analysis utilized quarterly data from 83 Islamic rural banks on Java Island between 2017-2021.
Policy recommendations stress enhancing depositor confidence and improving the capital base for greater bank stability.

Putri et al. (2025) studied this question.

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