Analysis of Financing and Poverty on Economic Growth in Indonesia

The causal relationships among financing from various Islamic Banks, poverty and economic growth are the objectives in this research. Panel data is the appropriate model applied in this research. The data are collected from all provinces in Indonesia from 2011-2017 to seek the causal relationship. We find that disbursement of Islamic Commercial Banks financing significantly leaven Indonesian economic growth. However, it is also depicting  unpleasant picture as most provinces unfortunately still lied in second, third and last quadrants  rather than in the first quadrant. We also argue that our finding attests financing from various Islamic Banks can spur Indonesian economic development. Poverty attests conversely as it clearly lead  to prejudice  the economy. The research also provides some suggestions such as  the government and its related agencies should concentrate in increasing funding to grow a higher economy and they are urged to create such policy in order to manage the  level of poverty.