Determinants of Non-Performing Financing for Islamic Commercial Banks in Indonesia with a Dynamic Panel Data Approach

Studying Non-Performing Financing (NPF) factors in the Indonesian Islamic banking sector is crucial to mitigating credit risk. In this study, we used factor analysis determine indicators of internal and external banking, then system GMM estimation techniques examine dynamic effect on NPF with panel data set at 14 Commercial Banks 20 Business Units 33 provinces from 2015 2019. The empirical results show that are formed two dimensions: fundamental dimension (Assets, Financing, TPF) performance measurement consisting ROA, CAR, CIR. External consist (inflation SBIS). current not affected by previous years NPF. Conversely, can decrease if ROA increases more than needs strengthen its through ability manage invested funds generate profits financing monitoring team mitigate