Do Mudarabah and Musharakah financing impact Islamic Bank credit risk differently?

Warninda, Titi Dewi; Ekaputra, Irwan Adi; Rokhim, Rofikoh

doi:10.1016/j.ribaf.2019.03.002

Cited by 66 publications

(89 citation statements)

References 32 publications

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“…Hasil pengujian ini berbanding terbalik dengan hasil penelitian Warninda, Ekaputra, & Rokhim (2019) yang menyatakan bahwa pembiayaan musyarakah lebih berisiko dibandingkan pembiayaan mudharabah. Perbedaan hasil ini dimungkinkan adanya perbedaan objek penelitian, dimana terdapat perbedaan regulasi dan manajemen risiko pada masing-masing negara objek penelitian.…”

Section: Pembahasan A) Pengaruh Pembiayaan Mudharabah Terhadap Npfunclassified

Karakteristik Pembiayaan dan Non Performing Finance Perbankan Syariah 2015–2018

Putra¹

2019

MALIA

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Each type of contract in financing in a Sharia Bank has different characteristics. This can not be separated from the type of transaction used in financing. This study aims to analyze the effect of financing characteristics based on the contract in the distribution of funds, namely: mudharabah financing, musyarakah financing, murabahah financing and qardh loans to financing risk which is proxied by the ratio of non-performing finance (NPF). The research is a quantitative associative study with the object of a sharia commercial bank in Indonesia. The sampling technique used a purposive sampling technique where the number of samples analyzed was 66 consisting of 11 Islamic Commercial Banks with the period 2011-2016. The analysis shows that mudharabah financing has a positive effect on NPF, murabahah financing has a negative effect on NPF. While musyarakah and qardhul hasan financing does not affect the NPF ratio.

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Section: Pembahasan A) Pengaruh Pembiayaan Mudharabah Terhadap Npfunclassified

Karakteristik Pembiayaan dan Non Performing Finance Perbankan Syariah 2015–2018

Putra¹

2019

MALIA

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“…Firstly, the Musharakah contract in Indonesian ICBs is a contract that has a higher risk than the Mudharabah contract. This is confirmed by the findings of Khan & Ahmed (2001), dan Warninda et al (2019). Secondly, musharakah is one of the Profit Loss Sharing (PLS) schemes that is run more by Islamic banks than Mudharabah.…”

Section: Introductionmentioning

confidence: 54%

“…Other studies have found that revenue sharing in the form of musharakah has a higher risk compared to other contracts (Khan and Ahmed, 2001;Warninda, et al, 2019). However, their results do not report the level of risk in the musharakah contract, so it requires a deeper study to uncover the causes of the high risk of the contract.…”

Section: Introductionmentioning

confidence: 83%

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Risk Determinant of Musharakah Financing: A Study in Indonesia

Ramli

Masyita

Anwar

2020

JOFRP

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The purpose of this paper is to find out the influence of internal and external factors on the risk of musharaka financing of Islamic Commercial Banks in Indonesia. Financing risks in previous Islamic banking studies focus more on overall financing risks involving internal and external aspects, both separately and jointly. There have been no studies that examine the internal and external aspects of sharia commercial banks on financing risks, especially in the musharakah contract. This study will complement the literature on the aforementioned issue. This study uses a quantitative method with panel data regression analysis. The data used is quarter financial ratio data from all Sharia Commercial Banks in Indonesia for the period 2012-2017. The results of the study show that bank internal factors predominantly influence the risk of musharakah financing. Whereas on external factors, only GDP growth has a significant effect.

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“…The fifth risk we can relate to PLS contracts such as mushārakah and mud .ā rabah is credit risk (Warninda et al, 2019) work on mud .ā rabah claims that the highest level of credit risk is achieved when mushārakah contracts constitute 37-39% of the bank's financing.…”

Section: Introductionmentioning

confidence: 99%

Can Real Options Reduce Moral Hazards in Profit and Loss Sharing Contracts?: A Behavioural Approach Using Game Theory and Agent Based Simulation

Fakir

Tkiouat

Fairchild³

et al. 2020

J. Islam. bus. manag.

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In this paper, we try reducing the moral hazard of profit misreporting in Profit and Loss Sharing Contract (PLS). In this kind of contracts , the corporate manager has a temptation to misreport profits which can lead to either project failing or to financiers receiving an unfair allocation of profits. To help in solving this problem we propose a new model that includes a real option that gives the corporate manager (agent) the right, but not the obligation, to gradually buy shares in the corporation from the financier/bank. We compare our results with the standard case of PLS without real options. We show, using a multi-agent simulation (Netlogo) that embedding real options in the PLS contract can reduce the profit misreporting case. The fact that PLS contracts are riskier compared to other forms of financing such as debt, provides an incentive for the creation of models that reduce their risk to capital providers. Given the results obtained from our real options model, the latter could prove to be of practical use to financial institutions willing to engage in PLS financing.

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Do Mudarabah and Musharakah financing impact Islamic Bank credit risk differently?

Cited by 66 publications

References 32 publications

Karakteristik Pembiayaan dan Non Performing Finance Perbankan Syariah 2015–2018

Karakteristik Pembiayaan dan Non Performing Finance Perbankan Syariah 2015–2018

Risk Determinant of Musharakah Financing: A Study in Indonesia

Can Real Options Reduce Moral Hazards in Profit and Loss Sharing Contracts?: A Behavioural Approach Using Game Theory and Agent Based Simulation

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