THE EFFECT OF MURABAHAH FINANCING, FINANCING DEPOSIT RATIO (FDR), AND THIRD-PARTY FUNDS ON PROFITABILITY WITH NON-PERFORMING FINANCING (NPF) AS A MODERATING VARIABLE IN BPRS

In the realm of Islamic banking and finance, the mechanisms and factors influencing the profitability of Islamic financial institutions have garnered significant attention from researchers and practitioners alike. Islamic People's Financing Banks, as specialized entities operating under Islamic financial principles, play a vital role in offering financial services that adhere to Shariah principles. This study aims to investigate the impact of Murabahah Financing, Financing Deposit Ratio (FDR), Third-Party Funds (DPK), and Non-Performing Financing (NPF) on Profitability in Islamic People's Financing Banks in Indonesia. The research employs a quantitative approach, utilizing documentation techniques and secondary data collected from BPRS financial reports available on the Financial Services Authority (OJK) website for the 2020-2021 period. The sample selection employs a random sampling technique, resulting in a total of 132 samples. The study employs various data analysis methods, including descriptive statistical analysis, tests for classical assumptions, multiple linear regression, and moderated regression analysis. Based on the partial results of the study, it is observed that Murabahah Financing, Financing Deposit Ratio (FDR), and Third-Party Funds (DPK) do not exhibit a significant influence on profitability. Conversely, Non-Performing Financing (NPF) demonstrates a significant negative impact on profitability. Furthermore, with the inclusion of NPF as a moderating variable, the research findings indicate that NPF is unable to moderate the effects of Murabahah Financing, FDR, and Third-Party Funds on Return on Assets (ROA)


INTRODUCTION
Regarding the economic growth in Indonesia, there is currently a sector with the potential to enhance economic growth in the country, namely the Islamic Economic and Financial sector.According to the Coordinating Ministry for Economic Affairs, Indonesia possesses a substantial potential in Islamic finance, as evident from advancements in financial inclusion indices and the total assets held by the Islamic financial sector.As stated in the Indonesia Islamic Finance Development Report 2021, during the second year of the Covid-19 pandemic, the Islamic financial assets in Indonesia grew by 13.82%, reaching Rp2,050.44 trillion, an increase from the previous year's Rp1,801.40trillion.The Islamic Banking sector, accounting for 33.83% of the Islamic finance, achieved a growth of 13.94%.The growth of Islamic financial institutions in Indonesia, particularly Islamic banks, has been rapid.Alongside its development, the Indonesian Islamic banking

LITERATURE REVIEW 2.1. Stewardship Theory
The stewardship theory was developed by Donaldson and Davis in 1989 to explain how managers act as stewards in situations where they are not driven by personal goals but prioritize essential common goals or needs (Donaldson & Davis, 1991).To become a source of third-party funds, banks aim to gather funds from the public in the form of savings, checking accounts, and deposits.According to the stewardship philosophy, banks have the responsibility to manage customer funds as their stewards.In this research, the stewardship theory is used to explain how managers are motivated to modify their policies to maximize the effective collection of customer funds, including financing, musyarakah, mudharabah, murabahah, and ijarah.Managing funds acquired through the collection of third-party funds is a bank's task.Responsibilities include managing funds obtained through financing.High bank profitability can impact the high nominal amount of money that needs to be channeled (Aranita et al., 2022).

Shariah Enterprise Theory
Trijuwono introduced the term "Shariah Enterprise Theory," stating that all resources in this world are solely creations of God, who is also the sole owner (Triyuwono, 2001).In Surah Al-Baqarah: 254, it is also mentioned that wealth is the primary entrusted resource owned by stakeholders.Humans are entrusted to manage assets, and this management must be as effective as possible.Wisely managed wealth can be utilized, made productive, and assist others.To exhibit obedience and compliance with Shariah Enterprise Theory in upholding Islamic law, the distribution of welfare and business outcomes must be based on halal, thoyib, and riba-free criteria.As a reminder that Shariah-compliant banks must be accountable to owners, stakeholders, and God, the Shariah Enterprise Theory is applied.Clearer and more transparent financial reporting will enhance the implementation of the Shariah Enterprise Theory, thereby boosting the financial performance of Islamic People's Financing Banks and instilling confidence in capital owners to invest their funds as third-party funds.The allocation of funds can be influenced by a larger amount of third-party funds, and the high profitability of Islamic People's Financing Banks can be affected as a result (Aranita et al., 2022).

Profitability
The best measurement to assess bank performance is profitability.The overall condition of a bank during a specific period, including its financial status, is referred to as bank performance.As Bank Indonesia, as the supervisor and regulator of the banking sector, places a strong emphasis on a bank's profitability, measured by its assets, which are primarily derived from public savings, Return On Assets (ROA) is used to determine the level of profitability.The higher a bank's ROA, the greater the generated profit and the better the bank's asset utilization (Ardana, 2018).Owners and managers of Islamic banks focus on profitability because the ultimate goal of banking operations is profit maximization.As a result, bank management develops various methods to achieve the desired profitability targets (Dewi & Sudarsono, 2021).

Murabahah Financing
The murabahah contract, between the seller (the bank) and the buyer (the customer), can be applied to sales transactions in Islamic banking.Bai' al-murabahah is essentially a sales transaction with agreed-upon additional profit.The bank purchases a product from a supplier to fulfill customer needs and then resells the product to the customer with an agreed-upon margin (Yusuf & Kholik, 2019).In a murabahah sales transaction, the profit is added to the agreed-upon purchase price.The bank informs the customer of the acquisition price as part of the transaction process.Murabahah differs from conventional sales in that the seller discloses both the cost price of the item and the expected profit.To reach an agreement, the buyer and seller may negotiate the profit margin (Fachrurrazi & Olivia, 2021).

Financing Deposit Ratio (FDR)
The FDR ratio, used to measure a bank's liquidity level and similar to the Loan Deposit Ratio (LDR) in conventional banks, indicates a bank's ability to meet financing demand using its total assets (Nasution, 2018).According to Bank Indonesia regulations, the target FDR is 85%-100% (Somantri & Sukmana, 2019).If a bank's Financing Deposit Ratio (FDR) is less than 85% (for example, 60%), it can be concluded that only 60% of the collected funds can be channeled by the bank.With a Financing Deposit Ratio (FDR) of 60%, it means that 40% of the generated funds are not channeled to those in need, indicating that the bank is not fulfilling its primary role of bridging those with excess funds to those in need.The more critical the bank's liquidity condition, indicated by a higher Financing Deposit Ratio (FDR), while a lower Financing Deposit Ratio (FDR) indicates inefficiency in financing distribution.Banks will generate more money if the Financing Deposit Ratio (FDR) is at the level required by Bank Indonesia (assuming the bank can effectively channel its financing) (Jatmiko & Agustin, 2018).

Third-Party Funds (DPK)
The funds collected from the public form the foundation of the funds managed by the bank to generate profit (Usman, 2009).Both Shariah-compliant commercial banks and BPRS can engage in fund collection activities based on Shariah principles.Funds collected from the public, also known as third-party funds, are the largest and most reliable source of funds for the bank (constituting 80% to 90% of the total funds managed by the bank).Third-party funds are similar to banks borrowing funds from the public, in line with the bank's role as a collector of funds from those with excess funds.According to Law No. 21 of 2008 on Shariah banking, Article 1 states that deposits are funds entrusted by customers to Shariah Banks and/or Shariah Business Units (UUS) based on the wadi'ah contract or other contracts not conflicting with Shariah principles, in the form of checking accounts, savings, or other equivalent forms.

Non-Performing Financing (NPF)
Problematic financing classified as substandard, doubtful, or bad is known as Non-Performing Financing (NPF), which is provided by the bank to customers.While NPF refers to Shariah-compliant banking, Non-Performing Loan (NPL) is used in conventional banking.The NPF ratio indicates how effectively Shariah-compliant banks control the risk associated with the financing they provide.Bank financing management is below standard or non-performing financing is higher when the NPF ratio is higher.Conversely, a bank performs better in terms of management when the NPF ratio is lower (Hartanto et al., 2020).An indicator of bank problematic financing is the NPF ratio.Bank profitability is affected by NPF.A high NPF level results in low financing.A low financing level leads to low profitability (Astuti & Sari, 2021).

RESEARCH METHODS
A quantitative approach was employed in this study to rigorously address the research objectives.The data utilized for this research was sourced from the Financial Services Authority (OJK) and categorized as secondary data (Sugiyono, 2015).The focal point of this study was the Shariah People's Financing Banks (BPRS) registered with the OJK between the years 2020 and 2021, constituting a total population of 164 BPRS entities.
To ensure both the feasibility and representation of the research, the systematic technique of random sampling was adopted.By following pre-established criteria, a subset of 132 BPRS entities was selected to form the basis of the analysis.The ensuing stages of the research encompassed data processing, during which the Statistical Package for the Social Sciences (SPSS) version 25 software was employed to organize and analyze the collected data.To extract meaningful insights and foster dependable conclusions, a combination of analytical methods was applied.
The principal analytical methodologies entailed multiple regression analysis and moderated regression analysis.Before these analyses were conducted, it was paramount to verify the satisfaction of the underlying assumptions for these techniques.As such, the research process encompassed assessments aimed at confirming the fulfillment of analysis prerequisites and classical assumptions.These assessments assured the appropriateness of the chosen analytical tools for the dataset.
Furthermore, the research process included hypothesis testing, a critical step in systematically evaluating the relationships between the variables.This process played a pivotal role in either confirming or refuting the formulated hypotheses, grounded in the evidence derived from the dataset.
The following is a framework obtained from the relationship between the independent variable and the dependent variable through the moderation variable:

. Normality Test Table 1. Result of Normality Test
On the basis that if the probability (sig)> 0.05 means that the data is normally distributed.From the results of SPSS 25 testing, the significance value is 0.200, the value of 0.200> 0.05 can be concluded that the data is normally distributed.Based on the table of linearity test results, the significance value of Deviation from Linearity of all variables is> 0.05, it can be concluded that there is a linear relationship between the independent variable and the dependent variable.

Multicollinearity Test Table 3. Result of Multicollinearity Test
Based on the table of multicollinearity test results above, it can be seen that there is no multicollinearity between the independent variables, because the results of the calculation of the tolerance value of each independent variable show no results less than 0.10 and the results of the calculation of the variance inflation factor (VIF) value also show the results of each independent variable no more than 10.It can be concluded that there is no multicollinearity between the independent variables in this regression model.

Heteroscedasticity Test Table 4. Heteroscedasticity Test
Based on the table of heteroscedasticity test results above, it shows that the regression model does not contain any symptoms of heteroscedasticity.It can be seen from the probability of significance of each variable> 0.05 so it can be concluded that there are no symptoms of heteroscedasticity.

. result of Autocorrelation Test
Based on the table above, it can be seen that the results of the autocorrelation test using Durbin Watson (DW test) show that the Durbin Watson value is 1.884 with a value of dL = 1.6539 and dU = 1.7786 while 4-dL = 2.3461 and 4-dU = 2.2214.With a DW value of 1.884 which is between dU and 4-dU (1.7886 < 1.884 < 2.2214), it can be concluded that there is no autocorrelation in this study.In addition, the DW value> dL and the DW value < 4-dL, so there is no autocorrelation.

T test Table 6. T Test Results
Based on table 6, the research results for the t test are as follows: a. Murabaha financing has a significance value of 0.698>0.05, it can be concluded that H0 is accepted and H1 is rejected, that Murabahah financing has no effect on profitability.b.Financing Deposit Ratio (FDR) has a significance value of 0.201>0.05, it can be concluded that H0 is accepted and H1 is rejected, that Financing Deposit Ratio (FDR) has no effect on profitability.c.Third-Party Funds (DPK) has a significance value of 0.294>0.05, it can be concluded that H0 is accepted and H1 is rejected, that Third-Party Funds (DPK) has no significant effect on profitability.d.Non-Performing Financing (NPF) has a significance value of 0.000 <0.05, it can be concluded that H0 is rejected and H1 is accepted, that Non-Performing Financing (NPF) has a significant effect on profitability.Based on the table of coefficient of determination test results (Adjusted R²) above shows the R² value of 0.120.This shows that the dependent variable profitability can be explained by the independent variables of murabahah financing, Financing Deposit Ratio (FDR), Third-Party Funds (DPK), Non-Performing Financing (NPF) by 12%, while 88% is influenced by other variables outside of this study.

Multiple Linear Regression Analysis Table 8. Results of Multiple Linear Regression Analysis
Based on the results of the multiple linear regression analysis in Table 4.15 above, the equation obtained is as follows: Y = 0.989 -0.091X1 -0.011X2 + 0.241X3 -0.159Z Interpreting the equation above, the following explanations can be provided: a.Based on the multiple linear regression equation above, the constant value is 0.989.This implies that when the independent variables, namely Murabahah Financing, Financing Deposit Ratio (FDR), Third-Party Funds (DPK), and Non-Performing Financing (NPF), are considered constant, the predicted value of profitability will be 0.814.b.The coefficient of the Murabahah Financing variable (X1) in the multiple linear regression model is -0.091.Therefore, it can be concluded that if the value of the Murabahah Financing variable increases by 1 unit while keeping the others constant, the predicted value of the profitability variable will decrease by 0.091, indicating a negative effect.

Moderated Regression Analysis (MRA) Table 9. Moderated Regression Analysis Result (MRA)
Based on the results of the moderation regression analysis in Table 4.16 above, the equation obtained is as follows: Y = 5.894 -0.841X₁ -0.010X₂ + 0.700X₃ -1.306Z + 0.214X₁Z -0.001X₂Z -0.140X₃*Z Interpreting the equation above, the following explanations can be provided: a.Based on the moderation regression equation, the constant value is 5.894.This implies that when the independent variables, namely Murabahah Financing, Financing Deposit Ratio (FDR), Third-Party Funds (DPK), and Non-Performing Financing (NPF), are considered constant at a value of 0, the predicted value of Profitability will be 5.894.b.The coefficient of the independent variable Murabahah Financing (X1) in the moderation regression model is -0.841.This means that if Murabahah Financing increases by 1 unit while keeping the others constant, the predicted value of Profitability may decrease by -0.841, indicating a negative direction.

The Influence of Murabahah Financing on Profitability
Based on the research findings presented above, the significance value obtained for the Murabahah Financing variable is 0.698, with a significance value > 0.05, indicating no significant influence of Murabahah Financing on the profitability of Shariah People's Financing Bank (BPRS).In the multiple regression analysis, the coefficient value is -0.091, meaning that if Murabahah Financing increases by one point, profitability will decrease by 0.091.The negative coefficient of Murabahah Financing implies that higher Murabahah Financing leads to lower bank profitability, and conversely, lower Murabahah Financing is associated with higher profitability.Murabahah Financing is one of the most dominant forms of financing and an important source of income for Islamic banking, particularly BPRS (Agza & Darwanto, 2017).However, the results of this study indicate no significant influence between murabahah financing and profitability, with a negative coefficient.This could be attributed to BPRS having operational expenses exceeding the margin income from Murabahah Financing.The low

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margin profit income from Murabahah Financing contributes to less-than-ideal bank income and limited impact on profitability.Despite the substantial volume of Murabahah Financing, the expected higher return seems unrealized.The income received from Murabahah Financing still falls short of covering the operational expenses incurred (Fazriani & Mais, 2019).This is evidenced by BPRS Attaqwa in 2020, with Murabahah Financing at 3,847,126, smaller than operational expenses of 5,176,188, and BPRS Riyal Irsyadi in 2021, with Murabahah Financing of 3,952,379, smaller than operational expenses of 7,162,148.These research findings align with prior studies conducted by (Aravik et al., 2022;Ardheta & Sina, 2020;Bahri, 2022;Sarno, 2020;Wahyuni, 2022), which show no influence between Murabahah Financing and profitability.In contrast, studies by (Niam & Wardana, 2022) and (Aranita et al., 2022) state that Murabahah Financing has a positive and significant influence on profitability.This is possible because financing through the Murabahah contract is one of the most commonly used forms of financing in transactions.Profitability can be influenced by income margins from fund disbursement to the public.Bank profitability increases in line with rising profits.

The Influence of Financing Deposit Ratio (FDR) on Profitability
Based on the research findings presented above, the significance value obtained for the Financing Deposit Ratio (FDR) variable is 0.201, with a significance value > 0.05, indicating no significant influence of Financing Deposit Ratio (FDR) on the profitability of Shariah People's Financing Bank (BPRS).In the multiple regression analysis, the coefficient value is -0.011, meaning that if Financing Deposit Ratio (FDR) increases by one point, profitability will decrease by 0.011.The negative coefficient of Financing Deposit Ratio (FDR) implies that higher Financing Deposit Ratio (FDR) leads to lower bank profitability.The ratio known as Financing Deposit Ratio (FDR) is used to measure the liquidity level of the bank and indicates the bank's capacity to meet financing demands using its entire assets.The high or low level of this ratio reflects the bank's liquidity amount.A high Financing Deposit Ratio (FDR) indicates significant financing risk, as a higher amount of financing funds is disbursed, leading to a higher risk of problematic financing.Elevated financing risk results in a decline in profitability.However, this research indicates that Financing Deposit Ratio (FDR) has no influence on profitability, with a negative coefficient.This is presumed to occur because the high level of bank liquidity is managed through CAR (Capital Adequacy Ratio) or capital generated by the bank.This allows the bank to address the increase in NPF (Non-Performing Financing) caused by the rise in FDR.With a high NPF value, BPRS should experience losses, but the CAR generated prevents the bank from incurring losses.These research findings align with previous studies by (Hartanto et al., 2020;Jatmiko & Agustin, 2018;Said & Ali, 2016;Suartini et al., 2018;Utami & Tubastuvi, 2019), which state that Financing Deposit Ratio (FDR) has no influence on profitability.
In contrast, different results are found in studies by (Mesakh, 2019) and (Almunawwaroh & Marliana, 2018), which reveal that the Financing to Deposit Ratio (FDR) has a positive influence on profitability.This is possible because the FDR ratio is a measurement tool used to assess how well a bank channels funds to its customers.The amount of money disbursed by the bank from third-party funds increases along with the rise in the Financing Deposit Ratio (FDR) ratio.Fund disbursement enhances bank ADVANCED RESEARCH ON SHARIA FINANCE AND ECONOMIC WORLDWIDE https://ojs.transpublika.com/index.php/CASHFLOW/E-ISSN : 2809-8226 | P-ISSN : 2809-848X 545 ADVANCED RESEARCH ON SHARIA FINANCE AND ECONOMIC WORLDWIDE https://ojs.transpublika.com/index.php/CASHFLOW/E-ISSN : 2809-8226 | P-ISSN : 2809-848X

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Figure 1.Research Framework ADVANCED RESEARCH ON SHARIA FINANCE AND ECONOMIC WORLDWIDE https://ojs.transpublika.com/index.php/CASHFLOW/E-ISSN : 2809-8226 | P-ISSN : 2809 ADVANCED RESEARCH ON SHARIA FINANCE AND ECONOMIC WORLDWIDE https://ojs.transpublika.com/index.php/CASHFLOW/E-ISSN : 2809-8226 | P-ISSN : 2809-848X 551 c.The coefficient of the Financing Deposit Ratio (FDR) variable (X2) in the multiple linear regression model is -0.011.Consequently, if the value of the Financing Deposit Ratio (FDR) variable increases by 1 unit while keeping the others constant, the predicted value of the profitability variable will decrease by 0.012, indicating a negative effect.d.The coefficient of the Third-Party Funds (DPK) variable (X3) in the multiple linear regression model is 0.241.This implies that if the value of the Third-Party Funds (DPK) variable increases by 1 unit while keeping the others constant, the predicted value of the profitability variable will increase by 0.241, indicating a positive effect.e.The coefficient of the Non-Performing Financing (NPF) variable (Z) in the multiple linear regression model is -0.159.Hence, if the value of the Non-Performing Financing (NPF) variable increases by 1 unit while keeping the others constant, the predicted value of the profitability variable will decrease by 0.159, indicating a negative effect.
ADVANCED RESEARCH ON SHARIA FINANCE AND ECONOMIC WORLDWIDE https://ojs.transpublika.com/index.php/CASHFLOW/E-ISSN : 2809-8226 | P-ISSN : 2809-848X c.The coefficient of the independent variable Financing Deposit Ratio (FDR) (X2) in the moderation regression model is -0.010.This indicates that if Financing Deposit Ratio (FDR) increases by 1 unit while keeping the others constant, the predicted value of Profitability may decrease by 0.010, indicating a negative direction.d.The coefficient of the independent variable Third-Party Funds (DPK) (X3) in the moderation regression model is 0.700.This implies that if Third-Party Funds (DPK) increase by 1 unit while keeping the others constant, the predicted value of Profitability may increase by 0.700, indicating a positive direction.e. Non-Performing Financing (NPF) as the moderating variable (Z) in the moderation regression model above has a coefficient of -1.306.This means that if NPF increases by 1 unit while keeping the others constant, the predicted value of Profitability may decrease by 1.306, indicating a negative influence.f.The moderation of the variable Non-Performing Financing (NPF) (Z) on Murabahah Financing (X1) in the moderation regression model has a coefficient of 0.214.Therefore, if NPF increases by 1 unit while keeping the others constant, the predicted interaction between Murabahah Financing and Profitability may increase by 0.214, indicating a positive influence.g.Moderation of the Non-Performing Financing (NPF) variable (Z) on the Financing Deposit Ratio (FDR) (X2) in the moderation regression model has a coefficient value of -0.001, meaning that if NPF increases by 1 item and the others are constant, it is predicted that the interaction of the Financing Deposit Ratio (FDR) on Profitability will decrease by 0.001 which means it has a negative direction of influence.h.Moderation of the Non-Performing Financing (NPF) variable (Z) on Third-Party Funds (DPK) (X3) in the moderation regression model has a coefficient value of -0.140, meaning that if NPF increases by 1 item and the others are constant, it is predicted that the interaction of Third-Party Funds (DPK) on Profitability will decrease by 0.140, which means it has a negative influence direction.

Table 2 . Result of Linearity Test THE EFFECT OF MURABAHAH FINANCING, FINANCING DEPOSIT RATIO (FDR), AND THIRD- PARTY FUNDS ON PROFITABILITY …
Indah Dwi Navita, Achmad Fauzi, Indah Muliasari