<b>Impact Of Macroeconomic And Bank Specific Factors On The Murabahah Financing Among Islamic Banks In Pakistan </b>

The purpose of this study is to examine the effect of macroeconomic and Islamic bank specific factors on Murabahah financing in Pakistan. The study took GDP growth rate, Inflation Rate, Interest Rate, GDP Per Capita, Advances to deposit ratio and NPL ratio as independent variables while Murabahah financing took as dependent variable. The study focused on Islamic commercial banks/ Institutions in banking Industry of Pakistan. The study took those Islamic banking firms / Institution who hold 70% of Islamic operations and the Data is taken for the period from 2014 to 2023. The data took on annual basis for Meezan Bank, Bank Islami, Dubai Islamic Bank and Bank Albaraka official websites and their annual reports. The study followed random sampling technique to consolidate the data and applied with the panel regression technique using E-views. The results of study revealed that overall model is accepted at the 5 percent level of significance with the probability value of 0.01476 of the F-statistics with value of 3.1103. Furthermore, R-square value observed 0.4374 that shows that selected independent variables has moderate impact on the Murabahah financing in the Pakistani Islamic Banking industry. The coefficient values show that there is significant impact of the change in GDP growth rate, change in GDP per capita, change in inflation rate, change in interest rate and NPL ratio on Murabahah financing at 5 percent level of significance with the significance value of 0.0000, 0.0085, 0.0001, 0.0017 and 0.0000 respectively. The coefficient values for change in GDP growth rate, change in GDP per capita, change in inflation rate, change in interest rate and NPL ratio on Murabahah financing reported -0.4864, 0.0.613, 0.5212, 0.5206 and 0.145 respectively. However, the impact of the change in advances to deposit ratio and lag variable of Murabahah financing observed insignificant at even 10 percent level of significance. Further Islamic banks/Institution are improving their operational efficiency and encourages or educate customers about economic risk and for better policy developments also Islamic banking professional and stakeholders aiming to enhance the strategic management of murabahah financing in Pakistan’s Islamic Financial sectors. Keywords: GDP Growth Rate, Inflation Rate, Interest Rate, GDP Per Capita, Advances To Deposit Ratio And NPL, Murabahah Financing.