Enhance Credit Risk Management

Oct 13, 2025 by leolavanderia.com.br 72 views

The Effect of Third Party Funds, Financing to Deposit Ratio, Non-Performing Financing, Return on Assets, Capital Adequacy Ratio, and Operational Costs on Mudharabah Financing at Sharia Commercial Banks in Indonesia for the 2014-2018 Period

Introduction

Mudharabah financing is a crucial component of Sharia commercial banks in Indonesia, providing a unique opportunity for businesses and individuals to access financing while adhering to Islamic principles. However, the growth of mudharabah financing has been influenced by various factors, including financial performance, operational efficiency, and risk management. This study aims to examine the effect of six financial variables on the growth of mudharabah financing at Indonesian Sharia commercial banks (BUS) for the 2014-2018 period.

Methodology

This study uses a causal research method with a quantitative approach, analyzing annual data from 7 BUS listed on the Indonesia Stock Exchange. The total observation reaches 35. Multiple linear regression analysis was conducted using SPSS software version 23, with the following stages: descriptive statistics, classical assumption tests, multiple linear regression, and hypothesis testing.

Results

The results of this study show that third party funds (DPK) and return on assets (ROA) have a partial significant influence on mudharabah financing. Simultaneously, the six variables studied also have a significant effect on mudharabah financing.

The Influence of Each Variable

Third Party Funds (DPK)

DPK is the main source of funds for BUS, and the higher the DPK, the greater the bus's ability to channel financing, including mudharabah financing. This is because DPK is the basic capital for buses to carry out operational activities, including financing.

Financing to Deposit Ratio (FDR)

FDR reflects the efficiency of the bus in channeling funds. The higher the FDR, the greater the proportion of funds distributed as financing. Mudharabah financing, as one type of financing, will be affected by FDR because the higher the FDR, the greater the potential for the distribution of mudharabah financing.

Non-Performing Financing (NPF)

NPF reflects the quality of assets and bus capabilities in managing credit risk. The high NPF shows that the bus has difficulty in collecting bad credit. The high NPF tends to inhibit the growth of mudharabah financing because the bus will be more careful in channeling financing.

Return on Asset (ROA)

ROA is a bus profitability indicator. The higher the ROA, the more efficient the bus in generating profits from its assets. The high ROA can encourage buses to increase financing distribution, including mudharabah financing.

Capital Adequacy Ratio (CAR)

CAR is an indicator of the bus financial health. The higher the CAR, the stronger the business position of the bus. The high CAR provides space for buses to increase financing distribution, including mudharabah financing, because it has adequate capital reserves to bear the risk.

Operational Costs for Operating Income (BOPO)

BOPO reflects the operational efficiency of the bus. The lower the BOPO, the more efficient the bus in managing operational costs. Operational efficiency can increase bus profitability and encourage financing distribution, including mudharabah financing.

Implications of this Research

The results of this study provide important insights for buses to increase the growth of mudharabah financing. Bus needs to focus on strategies to increase DPK and ROA to be able to increase the distribution of mudharabah financing. Increasing operational efficiency and credit risk management is an important key to achieving sustainable financing growth. This research can also be useful for regulators and stakeholders to understand the dynamics of mudharabah financing on Indonesian buses.

Conclusion

This study shows that DPK and ROA partially have a significant influence on mudharabah financing on Indonesian buses. Simultaneously, the six variables studied also have a significant effect on mudharabah financing. These results indicate that the growth of mudharabah financing on Indonesian buses is influenced by various factors, including financial performance, operational efficiency, and risk management. Subsequent research can expand the scope by including other relevant variables, such as interest rates and macroeconomic conditions, as well as a longer observation period.

Recommendations

Based on the findings of this study, the following recommendations are made:

Increase DPK: BUS should focus on increasing DPK to be able to channel more financing, including mudharabah financing.
Improve ROA: BUS should improve ROA by increasing operational efficiency and reducing operational costs.
Enhance Credit Risk Management: BUS should enhance credit risk management to reduce NPF and increase the growth of mudharabah financing.
Increase CAR: BUS should increase CAR to provide space for financing distribution, including mudharabah financing.
Improve Operational Efficiency: BUS should improve operational efficiency to reduce BOPO and increase profitability.

By implementing these recommendations, BUS can increase the growth of mudharabah financing and achieve sustainable financing growth.
Frequently Asked Questions (FAQs) about the Effect of Third Party Funds, Financing to Deposit Ratio, Non-Performing Financing, Return on Assets, Capital Adequacy Ratio, and Operational Costs on Mudharabah Financing at Sharia Commercial Banks in Indonesia for the 2014-2018 Period

Q: What is mudharabah financing?

A: Mudharabah financing is a type of financing provided by Sharia commercial banks in Indonesia, which is based on the principle of sharing profits and losses between the bank and the customer.

Q: What are the six financial variables studied in this research?

A: The six financial variables studied in this research are:

Third Party Funds (DPK)
Financing to Deposit Ratio (FDR)
Non-Performing Financing (NPF)
Return on Assets (ROA)
Capital Adequacy Ratio (CAR)
Operational Costs for Operating Income (BOPO)

Q: What is the main source of funds for Sharia commercial banks in Indonesia?

A: The main source of funds for Sharia commercial banks in Indonesia is third party funds (DPK).

Q: What is the significance of Financing to Deposit Ratio (FDR) in mudharabah financing?

A: FDR reflects the efficiency of the bank in channeling funds, and the higher the FDR, the greater the proportion of funds distributed as financing, including mudharabah financing.

Q: What is the impact of Non-Performing Financing (NPF) on mudharabah financing?

A: High NPF tends to inhibit the growth of mudharabah financing because the bank will be more careful in channeling financing.

Q: What is the role of Return on Asset (ROA) in mudharabah financing?

A: ROA is a bank profitability indicator, and the higher the ROA, the more efficient the bank in generating profits from its assets, which can encourage the bank to increase financing distribution, including mudharabah financing.

Q: What is the significance of Capital Adequacy Ratio (CAR) in mudharabah financing?

A: CAR is an indicator of the bank's financial health, and the higher the CAR, the stronger the bank's position, which provides space for financing distribution, including mudharabah financing.

Q: What is the impact of Operational Costs for Operating Income (BOPO) on mudharabah financing?

A: BOPO reflects the operational efficiency of the bank, and the lower the BOPO, the more efficient the bank in managing operational costs, which can increase bank profitability and encourage financing distribution, including mudharabah financing.

Q: What are the implications of this research for Sharia commercial banks in Indonesia?

A: The results of this research provide important insights for Sharia commercial banks in Indonesia to increase the growth of mudharabah financing by focusing on strategies to increase DPK and ROA, enhancing credit risk management, increasing CAR, and improving operational efficiency.

Q: What are the limitations of this research?

A: The limitations of this research include the use of a single dataset from 7 Sharia commercial banks in Indonesia, the limited scope of the study, and the potential for other factors to influence the growth of mudharabah financing.

Q: What are the future research directions based on this study?

A: Future research directions based on this study include expanding the scope of the study to include other relevant variables, such as interest rates and macroeconomic conditions, and conducting a longer observation period to capture more data points.