Abstract
Financing is one of the main activities and a major source of revenue for Islamic Cooperatives. This study aimed to analyze the effect of capital structure, third party funds and non-performing financing to the finance portfolio as well as to analyze the effect of capital structure, deposits, non-performing financing and the distribution of funding to profitability. The analysis technique used is multiple regression analysis, using F test and t test. The results of the analysis showed that the capital structure, third party funds and non-performing financing significantly effect on the distribution of funding. Capital structure, third party funds, and the distribution of funding has a significant effect on profitability, Sharia Cooperative BMT in Indonesia. While non-performing financing does not affect the profitability of Islamic Cooperative Baitul Maal Tamwil in Indonesia.
Highlights
Cooperatives are an important part of economy, one of them is as an intermediary whose job collecting funds from the public, and in the form of finance Distribution of funding allows people to make investments, distribution, and consumption of goods and services considering these all investment activities, distribution, and consumption is always associated with the use of money
Deposits and non-performing financing (NPF) have a significant effect on the distribution of cost
Capital structure, funding and distribution of third party financing have a significant effect on profitability
Summary
Cooperatives are an important part of economy, one of them is as an intermediary whose job collecting funds from the public, and in the form of finance Distribution of funding allows people to make investments, distribution, and consumption of goods and services considering these all investment activities, distribution, and consumption is always associated with the use of money. Financing the activities of banks is generating a profit, but the greatest risk in the cooperative is derived from the distribution of funding. One of the efforts undertaken by the company is strengthening the capital structure of appropriate profit, at least to cover the costs of the company's operations in order to maintain the company. Companies should always pay attention to proper capital structure in a good order. This is aimed to minimize cost of capital. The selection of alternative funding either from its own capital and foreign capital will greatly affect the amount of profitability obtained by the company. Relating to the company's capital structure, Berenguer-Contri et al (2011) reports that there is a positive relationship between short-term debt, long-term debt and total debt to profitability
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