Risk Mitigation Strategy for Default on Murabahah Financing Products at PT BPRS Lantabur Tebuireng Jombang

Abstract

The risk of default in Islamic banking, especially in financing products with customers, and the highest risk of default, namely murabahah financing. The focus of this study includes the strategies implemented, factors causing default, and the impact of mitigation strategies in influencing the number of defaults. The type of approach uses field research. This study is a descriptive qualitative study to describe the risk mitigation strategy. Data sources use primary data and secondary data with data collection techniques through interviews, documentation, and observation. Data analysis is carried out using data collection techniques, reduction, presentation, and conclusion. The results of this study indicate that the risk mitigation strategy used uses the 5C principle and is supported by the application of FAST in its realization. The factors causing the existence of a mitigation strategy are due to internal customer factors, internal bank factors, and external factors. Based on the results of the study, it is concluded that the risk mitigation strategy with the 5C principle has not had an optimal impact on the number of defaults, but the existence of this strategy can help in financing processes of billing history, customer information, and customer guarantees.