Indonesia’s agricultural sector deals with limited financial acces. Hence, Islamic banks can play a significant role in providing financial resources for national agricultural development. This research attempts to analyze influence and fungtion Islamic Banking of agricultural financing in Indonesia. It utilizes monthly data of statistics islamic banking from January 2014 until December 2016. It employs OLS (Ordinary Least Squares) as its analytical method. The finding show that bonus of Islamic Bank Indonesia Certificate (SBIS), third party fund, inflation, Non Performing Financing influence agricultural financing significantly. But, interest rate is not affecting agricultural financing. This research suggests the increase in agricultural financing proportion for agriculture should be in accordance with increase in total deposit value. It is also recommends improvement of the human resources competency in agriculture sector as well as strengthening instruments of islamic monetary policy.
Keywords : Agriculture Financing, Islamic Bank, Ordinary Least Squares (OLS
