Non Performing Financing Factor in Syaria Commercial Banking in Indonesia

Abstract

This research is based on one of the biggest risk faced by sharia banking that is related to problematic financing that happened due to failure in funding process at Bank Syariah. Sharia Banks must have the ability to manage risks on the distribution of financing so as to prevent the creation of non-performing financing (NPF). This study aims to examine the effect of return on Financing Profit and Loss Sharing (PLS), Bank Size and Inflation to Non-Performing Financing (NPF). The method used in this research is an analytical descriptive method to explain each research variable and verification with the quantitative approach to show whether there is the influence of the free variable on a dependent variable. The data to be analyzed in this study using panel data and will be analyzed by using multiple linear regression. The result of the research shows that the return of financing Profit and Loss Sharing has significant effect to Non-Performing Financing with negative influence direction, bank size influence to Non-Performing Financing with negative influence direction and inflation has no significant effect to Non-Performing Financing with positive direction. This study also shows the result that the return of financing Profit and Loss Sharing, bank size and inflation simultaneously (simultaneously) have an influence on Non-Performing Financing.