The Effect of Non-Performing Financing on Sharia BPR Performance

Abstract

This study aims to examine the effect of the risk level of non-performing financing (NPF) of mudharaba, musharaka, murabaha on BPRS performance in Central Java. The population in this study was 3-year data of financial statement i.e. from 2010 to 2012. The analysis method used in this research was multiple linear regression. The results showed that (1) mudharaba financing NPF, musharaka financing NPF, murabaha financing NPF simultaneously have positive effect on the performance of BPRS; (2) partial test showed that the NPF of Musharaka and NPF of Murabaha financing have significant positive effect on the performance of BPRS; (3) while the NPF of mudharaba financing has a positive effect but not significant on the performance of BPRS, because the Bank did not dare to take very high risk due to the absence of collateral. Keywords—mudharaba; musharaka; murabaha; performance; BPRS