In 2017, there was an increase in Non Performing Financing (NPF) in Islamic Bank until the NPF Ratio reached five point twenty seven percent. It shows that NPF Ratio in that period has exceeded the standard provision of Bank Indonesia of five percent. This phenomenon is one of things that caused by the high channeling of financing to customers without accompanied by an increase in financing quality. This study aims to examine the determinants of non performing financing period 2013-2018. This study uses secondary data from six Indonesia Islamic Bank. This study used descriptive explanatory method with data analysis technique is panel data regression. The dependent variable used in this study is the non performing financing. Furthermore, the independent variables are Capital Adequacy Ratio (CAR), Financing to Deposit Ratio (FDR) and Bank Indonesia Sharia Certificates (SBIS). The results showed that the CAR and FDR have a significant negative effect on NPF. While, the SBIS rate has not effect on NPF. The result of simultaneous regression show that the CAR, FDR and SBIS rate have effect on NPF. Thus it can be concluded that when CAR and FDR increases, it will decrease the NPF and when SBIS increases, it does not affect the NPF.
In the aspect of Islamic banking, mudharabah contracts are a type of contract that is quite common in various types of products and programs offered by Islamic banks. One of the Islamic bank products that has operational provisions using a mudharabah contract is financing or the process of borrowing capital.One of the highlights is financing using a mudharabah contract. Mudharabah itself can be interpreted as a cooperation contract between two parties in which the first party provides all the funds, while the second party acts as the manager of the funds and profits are shared between them according to the agreement while losses are only borne by the owner of the funds.
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