Determinants of Islamic Banking Going Concern: Effect of Musharakah, Murabaha, Ijara and Profitability on Non-Performing Financing

Abstract

The purposes of this research is to analyze the influence of Musharakah, Murabaha, Ijara and ROA of Non Performing Financing in Islamic Banking in simultaneous and partial . The contribution of this research is to provide feedback to banking management on the company’s policy to be taken in connection with the implementation of bad credit. This study uses the design of causality. Methods of analysis using path analysis. Population used is the Islamic Business Banking in Indonesia. Saturated sampling is the technique that is used as a sampling technique. The unit of analysis is annual financial statement. The results of this study is only partially the three variables are found to significantly affect the Non Performing Financing, they are Murabaha contract, Ijara contract, and Return on Assets. As for Musharakah contract proved to be not significantly affected. Simultaneously the results showed the fourth variable fit or match the data. The findings of this study was that going concern business of the company is very risky. The company’s core business is measured from negative ROA. This means that the company is able to extend credit, but unable to convert the financing to be an advantage. It automatically will threaten the company’s existence.

Pengaruh Ukuran Bank, Kredit, Kredit Bermasalah, Modal Dan Produk Domestik Bruto Terhadap Pengambilan Risiko Bank

“…Berdasarkan Peraturan Bank Indonesia No.6/10/PBI/2004 mengenai sistem penilaian tingkat kesehatan Bank, secara konvensional tingkat NPL yang melebihi 5% dapat dikatakan Bank tidak sehat (Hermanto & Anita, 2022). Jika NPL suatu bank sudah mencapai bahkan > 5%, Bank perlu mendapatkan perhatian khusus karena terindikasi secara tingkat kredit bermasalahnya situasi Bank dikatakan sudah tidak sehat (Febryansyah & Sihono, 2023). Non-Performing Loan (NPL) sebagai alat ukur kapabilitas manajemen Bank dalam proses pengelolaan kredit bermasalah pemberian Bank (Herlina & Purnamasari, 2021).…”

Relationship Between Musharakah, Credit Risk, and Profitability in Pakistan's Islamic Banks

“…As a result of these findings, policymakers, researchers, and practitioners in the field of Islamic banking will be able to gain a better understanding of the role of Musharakah in Islamic banking. Further research is needed to examine the dynamics of Musharakah in various contexts and determine its long-term impact on the profitability of Islamic banks (Febyansyah et al, 2023).…”

Effects of Islamic Modes of Financing on Profitability of Banking Institutions

“…In this case, the financial institution receives a security deposit from the customer or payment in full for any outstanding debt that is guaranteed or secured by collateral. Febyansyah, & Sihono (2023) and Iqbal and Molyneux (2005) stated that Murabahah occurs when there is a three party arrangement: the client who places an order with Islamic bank institution to purchase goods (products) from a supplier, the financial institution i.e. Islamic bank that is endeavoring to purchase the goods from the supplier and then sells them to the customer at pre-agreed price with a fixed credit period, and finally, the supplier who sells the commodity to the financial institutions.…”