Abstract
Sharia (Islamic law-compliant) bank financing has a crucial role to accelerate MSMEs (UMKM), but the market share is still below 5%. The purpose of this study is to identify and analyze the effect of financial performance on Sharia bank financing for the MSMEs’ sector and Msme's acceleration strategy in Indonesia for the period of 2005-2017. The research method uses descriptive & verification analysis and SWOT analysis. This study also uses OLS method and SWOT matrix by secondary data published by the OJK. The results of the study show MSMEs’ financing in Sharia banks is significantly influenced by Capital Adequacy Ratio (CAR), Non-Performing Finance (NPF), Return on Assets (ROA), Return on Equity (ROE), and Operating Expense Ratio (OER) to Operating Income. Accelerating Sharia bank financing for MSMEs through risk minimization (return maximization) and cost efficiency is purposed to solve low efficiency (OER), high non-performing financing (NPF), adequacy capital fluctuation (CAR), and low return of assets and equity (ROA, ROE).
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