The Impact of Using Murabahah Contracts on the Profitability of Islamic Banks in Indonesia

Abstract

This study explores the impact of Murabaha financing on the profitability of Islamic banks in Indonesia, focusing on the period from 2016 to 2023. Murabaha is a widely used financing instrument in Islamic banking, particularly in consumer and trade financing, due to its simple structure and compliance with Sharia principles. The research uses a quantitative approach with explanatory research design, examining the relationship between Murabaha financing (independent variable) and profitability, measured by Return on Assets (ROA) (dependent variable). Secondary data were collected from annual financial reports of Islamic banks in Indonesia, registered with OJK and Bank Indonesia. The findings indicate that while Murabaha financing contributes positively to bank profitability, challenges such as non-performing finance (NPF) and external macroeconomic factors must be considered for more accurate profit generation strategies. The study emphasizes the need for improved risk management, strategic product development, and regulatory support to strengthen the role of Murabaha in enhancing profitability within Indonesia’s rapidly growing Islamic banking sector.