Analysis of Capital Adequacy Ratio of Sharia Financial Institute in Overcome Non Performing Financing
Dewi Dwi Novianti, Novi Putri Diani

Indonesia university of education

Abstract

Financial institutions are basically as intermediary institutions, namely as collectors and distributors of funds. The distribution of funds in the form of financing by Islamic financial institutions has the risk of not being repaid (non-current payment) by the recipients of funds or commonly referred to Non Performing Financing (NPF) in Islamic banks or referred to bad debts in conventional banks. The purpose of this study is to analyze the capital adequacy owned by Islamic banks to cover the risk of non-refundable financing that has been distributed. The capital adequacy is measured by the Capital Adequacy Ratio (CAR). The data used are the capital adequacy ratio (CAR) and the nonperforming financing (NPF) for four years. Data were analyzed by simple regression analysis using SPSS application program. Research shows that capital adequacy ratio (CAR) has a significant effect on the level of nonperforming financing (NPF).

Keywords: capital adequacy ratio; non performing financing; Islamic bank

Topic: Financial Management and Accounting