Existing literature has studied the influence of internal and external factors on financing risk at small Islamic banks. Nevertheless, researchers have yet to find literature that discusses the role of telecommunication spending on financing risk in small Islamic banks in Indonesia. This study analyzes the role of telecommunication spending towards the community on financing risk in small Islamic banks as counted by the Non-Performing Financing (NPF) ratio. In comparison, telecommunication spending towards the community is estimated from the average household consumption for telecommunications. The regression analysis shows that the role of telecommunication spending towards the community has a significant negative effect on NPF. After taking the robustness test with similar variables, namely the average consumption of households with expenditure on telecommunications, the results are still dependable.
