Examining the Impact of Sharia Financing Models on Return on Assets of Islamic Rural Banks, 2023–2024

Abstract

Islamic Rural Banks (BPRS) are crucial financial intermediaries in providing sharia-compliant financing for micro and small enterprises in rural areas. This study examines the impact of murabahah, mudharabah, and musyarakah financing contracts on the profitability of BPRS, measured by the Return on Assets (ROA) ratio. Using a quantitative approach, panel data from BPRS financial statements during the 2023–2024 period were obtained from the Financial Services Authority (OJK). Panel data regression with classical assumption tests was employed to ensure model robustness. The results reveal that mudharabah financing significantly affects profitability, indicating that profit-sharing contracts strengthen BPRS performance. Meanwhile, murabahah and musyarakah financing show positive but statistically insignificant impacts on ROA. These findings underscore the dominant role of mudharabah in enhancing profitability and suggest the need for further optimization of murabahah and musyarakah. The study contributes updated empirical evidence on sharia financing practices in BPRS and offers practical implications for portfolio management.