Strategy To Increase The Portion Of Musyarakah Financing Portfolio To The Total Portfolio Of Syariah Banking Financing In Indonesia

Abstract

There has been a significant increase in the portion of musyarakah financing to exceed murabahah in recent years, but it is also accompanied by a relatively high NPF level of musyarakah compared to murabahah. The purpose of this study is to analyze the problems and solutions of musyarakah financing from internal and external aspects, analyze musyarakah financing solutions in order to develop a financing portfolio in Islamic banking in Indonesia, and recommend strategies for increasing the musyarakah contract financing portfolio towards the development of Islamic banking financing portfolios in Indonesia. The novelty in this study is related to the problems and solutions for developing a musyarakah financing portfolio from internal and external aspects of Islamic banks in Indonesia. In addition, there is a comparison of musyarakah financing management and implementation practices between Indonesian Islamic banking and other countries and formulating comprehensive and applicable strategic recommendations for the development of Islamic banking in Indonesia.

The research methodology uses a mixed method qualitative and quantitative approach using the Analytical Network Process (ANP) with the Strengths, Weaknesses, Opportunities, and Threats (SWOT) approach, and supported by the concept of Tauwhidi String Relation (TSR). The Tauwhidi String Relation approach can be used to provide a framework of Islamic values ​​and ethics into the SWOT identification process. Each element of the strategy is evaluated based on maqashid sharia, such as: justice (al-‘adl), maslahat (al-maslahah), amanah, and efficiency.

The research results which are also new novelty are that the main strengths of Islamic banking in Indonesia, such as adaptive financing schemes for various types of businesses and industrial sectors, and the profit-sharing structure of musyarakah has a more measurable profit and risk sharing system.Major weaknesses such as limited HR competency in project analysis and monitoring, and a more complex and lengthy financing approval process need attention to improve the competitiveness of musyarakah financing. Opportunities faced by Islamic banking such as increasing public preference for profit-sharing-based products, policy support from regulators for the development of profit-sharing financing and opportunities for digital technology integration for operational efficiency. Threats faced such as moral hazard risks and information asymmetry in financing management, uncertainty of economic conditions that affect portfolio performance, competition from simpler conventional financing products that need to be watched out for and mitigated. The internal and external position of Islamic banking musyarakah financing is in cell II with a growth and build strategy where market penetration is carried out, which involves efforts to increase market share in existing markets, and product development, which involves the development of new existing products.

Implementation of TSR through the Islamic Value Framework on Strength (S) or Opportunity (O) based Strategy leads to devotion to Allah, not just worldly interests. Assessing strength (S) and opportunity (O) not only in terms of material, but also the extent to which they support the purpose of human creation (worship). Avoiding strategic decisions that are contrary to Islamic principles (riba, manipulation, fraud, exploitation, and others). And all strategic decisions are based on the belief that Allah is the only source of power, sustenance, and truth. Strategies to increase the financing portfolio of musyarakah contracts are: (1) Islamic banking needs to implement a strategy to simplify the financing approval process to increase competitiveness against conventional financing products, 2) utilizing an effective supervisory system to minimize the risk of moral hazard and information asymmetry and developing standardization of customer financial reporting systems due to the increasing public preference for profit-sharing-based products (3) utilizing the flexibility of financing schemes to develop musyarakah products that are tailored to specific market segments and public preferences.