Sharia Banking Strategy in Improving Gross Regional Domestic Products in Sambas District, Indonesia

The low contribution of Sharia Banking to the growth rate of Gross Regional Domestic Product for seven years is present among the people of Sambas District, which incidentally the majority of Muslims, so it requires an effort to be able to make a bigger contribution. This study aims to formulate any strategies required by Sharia banking to increase the Gross Regional Domestic Product of Sambas District with a descriptive quantitative approach. Based on the results of the SWOT analysis and continued with the Quantitative Strategic Planning Matrix (QSPM) analysis, obtained seven alternative strategic sector development priorities that can be carried out by Sharia banking to increase the Gross Regional Domestic Product of Sambas District. Based on the assessment of strategic attractiveness, it shows that the most attractive strategy to be implemented is to collaborate with local governments and institutions in society, then follow the strategy of improving the quality of human resources and technology in the second position and then socializing the advantages of Sharia banking to all society levels, expand networks, determine superior financing products, be active in financing management, and streamline educational, socialization and promotion activities to gather customers.


INTRODUCTION
Sharia banking as part of the national banking system has an important role in the national economy. Basically, the role of Sharia banking in economic activity is not much different from conventional banking. The existence of Sharia banking in the national banking system in Indonesia is expected to encourage the development of the national economy.
The fundamental difference between Islamic and conventional banking lies in the principles in financial and operational transactions. 2) Socio-Economic Justice And Equitable Distribution Of Income And Wealth.

3) Stable Currency 4) Mobilization And Investment
Savings That Guarantees A Fair Return. 5) Effective Services. 2 Since the rise of the Islamic economy in Indonesia in the 1990s marked by the establishment of Bank Muamalat Indonesia, studies of the Islamic economic model have mushroomed. The presence of the first sharia-based bank was followed by the presence of other Islamic financial institutions. Sharia banking comes with a good performance when conventional banking is hit by a crisis of confidence and a liquidity crisis. Coupled with the economic crisis since 1997-1998, trust in conventional banks and the capitalism system has weakened. 3 . Such studies include those conducted by Muhammad Abduh and Nazreen T. Chowdhury who conducted a research on the role of Sharia banking in economic growth in Bangladesh using the cointegration methodology. 4 . Related research was also conducted by Khaled Abdalla who concluded that there was a statistically significant relationship between Islamic banks and Jordan's economic development. 5 The same research in Indonesia itself was carried out by Muhammad Abduh and Mohd Azmi Omar who found evidence that in the long run, the development of Islamic finance has a positive and important role as well as the relationship with economic growth and investment. 6 In other words, Sharia banking has proven to be effective as a financial intermediary that facilitates the transfer of funds from "surplus households to deficit households". effect on the increase in Banten's GRDP. However, the DPK and financing together / simultaneously affect the Banten GRDP. 9 While for the West Kalimantan region, research on the relationship between the financial sector and economic growth has also been carried out by Rizieq and Zulfahmi, but this research was not focused on one of the sharia or conventional financial sectors. The results of the study indicated that the development of the financial sector did not cause or not a causality for economic growth, but instead economic growth is the cause or causality for the development of the financial sector in West Kalimantan. 10 The presence of banking institutions, especially Sharia banking as an institution that collects and distributes funds to third parties is needed in an effort to drive the economy in West Kalimantan. In terms of number of offices, sharia banks in West Kalimantan in 2018 totaled 9 branch offices, 13 sub-branch offices and 1 cash office as well as 65 sharia service offices of sharia business units. form of current accounts, deposits and savings had increased from 1.315 trillion rupiahs in 2012 to 2.806 trillion rupiahs in 2018. While funds were channeled to various economic sectors through Islamic finance also increased, financing disbursed amounted to 1,740 trillion rupiahs in 2012 sloped upward to 4,454 trillion rupiahs in 2018. (BI, 2012-2013and OJK, 2014-2018.
Although it continued to show an increasing development, the development of Sharia banking in West Kalimantan is still relatively small compared to national developments, even more so at the district level the development was still very low. As in Sambas, the presence of sharia banking only began operating in 2011, precisely on January 12, 2011 PT Bank Syariah Mandiri was inaugurated by Sambas Regent Ir. H. Burhanuddin A. Rasid, then followed the West Kalimantan Syariah Development Bank at the end of 2011, and continued by PT Bank Muamalat at the end of 2012. The three Islamic banks continued to compete in contributing to drive the economy of Sambas District through various products offered. The development of Sharia banking in Sambas District had enormous potential when viewed from the condition of the community, where the majority of the population was Muslim. These developments can be seen from the development of total assets, third marriage funds and the amount of funding disbursed to the The purpose of establishing Sharia banking is not only for the benefits of the company but is also oriented towards creating prosperity in the community, besides it is expected to increase Gross Regional Domestic Products in Sambas District which reflects the growth of output per capita and increasing people's living standards. Gross Regional Domestic Products is part of Gross Domestic Products, which means if there is a change in Gross Regional Domestic Products at the regional level Gross Domestic Products will be affected. 11 The following table is the Sambas District GRDP Growth Rate for the past ten years.  , 2008 -2018 Looking at the table, it is clear that in the early days of the establishment of sharia banking in Sambas, there was a significant increase in the value of Gross Regional Domestic Products, from 3.1 trillion in 2011 to 9.6 trillion in 2012. This shows the enthusiasm of the community at the beginning of the establishment of Sharia banking in Sambas District. But over time until the seventh year there was only an increase in a relatively small amount. There are big signs of what caused this to happen? This condition is a reflection that the presence of Sharia banking in early 2011 to the seventh year in Sambas District did not significantly affect the growth rate of Gross Regional Domestic Products, inversely proportional to the expectations of various parties during the early establishment of Sharia banking, where the majority of Sambas District Muslims residents were expected to be a great opportunity for Sharia banking to become the economic driving force in Sambas District.
In reality, however, the size of the Muslim community in Sambas District could not be fully utilized by Sharia banking that it could not be separated from various problems both from internal Sharia banking as well as external parties. From the external perspective, the problem faced was that community understanding about Sharia banking was still minimal that people considered Sharia banking and conventional banking were similar concepts. Besides, the appeal of conventional banking is the ability to meet every development of customers needs to be a concern of conventional banking. Internally, Sharia banking still has constraints in the form of lack of competent human resources, lack of technology that is always updated with the development of customer needs, as well as lack of education, outreach and promotion activities so that large opportunities that are wide open cannot be captured.
Without making intensive and integrated efforts, Sharia banking as a newcomer to the world of banking in Sambas District will not be able to make a large contribution to the growth rate of Gross Regional Domestic Products, but it will also not be able to compete with conventional banking which has been able to win public hearts and trust. This is proven in the Muamalat bank case where in April 2016 the new Muamalat bank which was established at the end of 2012 was declared closed and withdrawn to the provincial branch office. It is a reflection that the growth of sharia banking in Sambas District seems to be running on the spot and had even declined. However, it cannot be denied that the two sharia banks which are still operational until now will continue to contribute to driving the economy of the Sambas District community and in the end will have an impact on increasing the gross regional domestic product of Sambas District. These various economic phenomena are one of the reasons this research was conducted, through this research, strategies are needed by Sharia banking to increase productivity will be discovered.

LITERATURE REVIEW Relationship between the Financial Sector and Economic Growth
In actual economic activity, economic growth means the development of the fiscal economy that occurs in a country such as an increase in the number and production of industrial goods, infrastructure, an increase in the number of schools, an increase in the production of economic activities and several other developments. There are at least four possible approaches that can explain the causal relationship between the financial sector and economic growth, namely. 12 12  First, finance is a determining factor for economic growth (the finance-led growth hypothesis) or "supply-leading view". This theory generally assumes that the financial sector is what drives economic growth. This theory is basically looking for the relationship between finance and economic development. Adherents of this theory believe that the existence of the financial sector which acts as an intermediary institution between those who are excess capital (surplus units) and those who lack capital (deficit units) will provide efficient allocation of sources of funding which will drive economic sectors in the future. The results of empirical research conducted by 13 , 14 and 15 , show that financial system expansion has a positive relationship to economic growth.
Secondly, finance follows economic growth (the growth-led finance hypothesis) or "the demandfollowing view". The essence of this hypothesis is that the development of the financial sector follows economic growth or entrepreneurial activity (enterprise)  growth of the financial sector. If the economic sector expands, the demand for banking products and services will also increase, therefore the banking sector will automatically increase as well. There have been many empirical studies supporting this hypothesis. 16 in their research in seven Asian countries found that Malaysia, Nyamar and Nepal supported the "growth-led-finance" hypothesis and only the Philippines supported the "finance-led growth" hypothesis.
The third approach is the interplay between finance and growth (the bidirectional causality view). This school of economic thought describes a two-way relationship or mutual influence between the financial sector and economic growth. This hypothesis states that a country that has good financial sector development will encourage a high level of economic expansion through technological advances and product and service innovation. This condition will then create a high level of demand for banking products and services. 17 If the banking institution responds effectively to these requests, then this response will stimulate higher economic performance.

The Role of the Banking Sector in Encouraging Economic Growth
According to Pohan in the context of macroeconomic development planning, the economy is grouped into four sectors, namely the real sector, the external sector, the government sector (fiscal) and the monetary sector. The four sectors have an interplaying relationship, in which aggregate demand growth is reflected in consumption, investment and net exports which are closely related to growth in bank credit, capital inflows, government spending and other factors. 23 Thus it is clear that the banking sector has a role to play in economic development planning, where economic development planning begins with projecting economic growth by taking into account the foreign sector and potential government budgets. To analyze the role of the banking sector in economic development, there are four pathways that can be used. The four pathways are called the substitution effect, the interest rate effect, the wealth effect, and the society's expectation effect. 24 The substitution effect occurs because the law of deminishing marginal utility, which applies to the consumption of goods and services, also applies to the use of money. The more money a person receives, the less utility-added value that person can get for the money received. The more money a person receives, the greater the person's desire to exchange his money for goods or services that can provide added value for greater use. The substitution effect is a link between the monetary sector and the real sector. Increased activity in the real sector will increase economic growth and expand employment opportunities.
However, the increase in production will not continue indefinitely. At some point it will reach saturation point. When the economic capacity reaches saturation point and available capital becomes limited, the economy will no longer be able to increase production and expand investment.
The impact that followed was no longer an increase in production but an increase in the price of goods and services, known as inflation. This condition is believed by Milton Friedman that monetary expansion in the long run will not encourage economic growth and expand employment opportunities, but will only increase inflation. 25 The interest rate effect arises because it affects people in choosing the form of wealth they want to have, whether in the form of money, financial assets, or real objects such as land, houses, gold and so on. Which gives the higher yield will be more desirable. In addition to encouraging people to exchange their money for goods and services, monetary expansion can also encourage people to exchange their money into financial assets. The public's preference to buy financial assets results in an increase in the prices of these financial assets, which means a decrease in interest rates for these financial assets. A reduction in interest rates will reduce the cost of capital and in turn will encourage production and investment activities, thereby increasing economic growth and expanding employment opportunities. On the other hand, a reduction in interest rates can encourage the movement of capital abroad or capital flight, especially to countries where the interest rate is more favorable. Capital flight in turn will be detrimental to the balance of payments, the balance of payments will illustrate the amount of exports, imports, services, and traffic from and to a country. 26 An increase in the price of goods or inflation, for some people who have wealth in real terms such as land, buildings, gold, etc., will cause an increase in the nominal value of their wealth. For example, land that originally cost IDR 100 million, with the increase in prices, the land value increases to IDR 120 million. Nominally, the landowner's wealth has increased. This increase in nominal wealth will make people feel richer than before inflation. This feeling will encourage people to 26 Pohan. increase their consumption. In monetary theory, this condition is known as the wealth effect, which has the same monetary effect as the substitution effect and interest rate effect.
Public expectations of rising prices will in turn drive interest rates up. If the interest rate increases less than the price increase, in real terms the return on financial assets owned will decrease. This decline will encourage people to shift their wealth from financial assets to real assets. Thus, if the public or company can make good use of various information or monetary data so that they can predict inflation, they will increase the price of the goods they produce. On the other hand, workers will also demand higher wages in advance of the inflation they expect to see. If this anticipatory action is carried out by the majority of the public, it will have two monetary implications, namely monetary policy to be ineffective because monetary policy does not change the real sector and public expectations of inflation will result in inflation which was originally only a conjecture, but becomes a reality.

RESEARCH METHODS
This research was conducted in Sambas City, West Kalimantan Province in 2018 using a quantitative descriptive approach. The main objective of this research was to formulate the strategies needed by Sharia banking in order to improve the GRDP of Sambas District. Determination of the sample using the method of purposive judgment sampling with criteria, namely Sharia Banking practitioners, Sambas District Government and academics who were considered experts and could understand sharia economics as well as conventional banking, while questionnaires were used to collect data.
Quantitative analysis started from weighting and calculating the scores of each internal and external environmental strategy factors, followed by calculating attractive scores (AS) from each alternative strategy obtained from the IE matrix and SWOT matrix analysis. The process of data analysis was carried out through three stages, namely, the input stage using the Internal Factor Evaluation (IFE) and External Factor Evaluation (EFE) matrices, then matching the stage using the External Internal Matrix (IE) and SWOT Matrix, and the last was a decision making using the Quantitative Strategic Planning Matrix (QSPM). 27

Internal Factor Analysis Evaluation Factor
The IFE matrix was used to summarize and evaluate the internal factors of Sharia banking related to strengths and weaknesses that were 27 Freddy Rangkuti, Analisis SWOT Teknik Membedah Kasus Bisnis (Gramedia Pustaka Utama, 1998). considered important in developing the business sector in order to improve the Gross Regional Domestic Product of Sambas District. The results of the IFE matrix analysis can be more clearly examined in the following table:

External Factor Evaluation Matrix Analysis
The EFE matrix was used to summarize and evaluate external factors of Sharia banking related to external opportunities and threats that were considered important in developing the business sector in order to improve the Gross Regional Domestic Product of Sambas District. The results of the EFE matrix analysis can be more clearly observed in the following table:

Internal-External Matrix )
The IE matrix is based on two key dimensions which are a combination of the two matrices, namely the IFE weighted total score and the EFE weighted total score. The purpose of using this matrix was to obtain a more detailed development strategy by Sharia banking in developing the business sector in order to improve the Gross Regional Domestic Product of Sambas District. The results of the IE matrix analysis can be more clearly observed in the following figure:

SWOT Analysis
Preparation of the strategy on the SWOT matrix made in accordance with the results obtained from the matrix IE (Internal-External), where the position of Sharia banking in developing the business sector in order to increase the Gross Domestic Product Sambas district is located on the cell I, which is the position in which the need to pursue growth or Growth in intensive and integrated. Based on the results of the evaluation of the IE matrix for the next SWOT matrix is compiled wherein the SWOT matrix produces four types of strategies that can be done, namely SO, ST, WO and WT strategies. The results of the SWOT analysis can be seen in the following table:

Quantitative Strategic Planning Matrix (QSPM) Analysis
Based on the calculation results of the Quantitative Strategic Planning (QSP) matrix, it is obtained the sequence of sharia banking strategies in developing the business sector in order to improve the Gross Regional Domestic Product of Sambas District. The assessment of strategic attractiveness shows that the most interesting strategy to implement is establishing cooperation with local governments and institutions in the community. The priority strategy sequences obtained are as follows: a. Establish cooperation with local governments and institutions in the community; b. Improve the quality of human resources and technology; c. To socialize the strengths of Islamic banks to all levels of society; d. Expanding the network; e. Establishing superior financing products; f. Active in financing management; g. Making education, outreach and promotion activities effective to bring customers together. Sharia banking is an institution that has a strategic position in meeting capital needs in the business world because the bank functions as an intermediary institution, 28 in addition to being a financial institution that also raises funds from the public. Sharia banking in its operational activities applies the principle of profit sharing that is fair in every transaction, so it does not burden the business sector in terms of business financing.
Reflecting on the economic crisis that proves the resilience of Sharia banking, Sharia banking and the business sector should always work together to develop and move the economy of a region or a country. In addition to the Sharia banking industry, the process of channeling financing is provided to the business sector, especially small and medium-sized businesses, is