The Influence of CAR, FDR, Inflation, GDP, Mudharabah Financing, and Musyarakah Financing on NPF of Islamic Commercial Banks in Indonesia

Abstract

Islamic finance in Indonesia has shown significant development. The development of sharia finance will increase the growth of sharia banks that operate and will have a positive impact on Islamic banks. However, with the development of Islamic banks, risky financing cannot be avoided, because the strategic function of banks is to distribute funds to the public for the sustainability of the country's economy and the welfare of the community. This study aims to determine the effect of CAR, FDR, Inflation, GDP, Mudharabah Financing, and Musyarakah Financing on the financing risk of Islamic Commercial Banks in Indonesia for the Period of 2015-2021. In contrast to previous research studies, this study added a zakat instrument to the GDP variable. This research is quantitative research using multiple linear regression. The population is 14 Islamic commercial banks. The sampling technique used is a purposive sampling technique so a sample of 8 Islamic commercial banks was obtained. The results of this study show that CAR, FDR, and Inflation have a significant negative effect on NPF, GDP, and Mudharabah Financing has a significant positive effect to NPF, Musyarakah Financing has an insignificant negative effect on NPF.