This article aims to explore financing risk management in Sharia People's Financing Banks (BPRS) in Indonesia, focusing on the factors that affect financing risk and its impact on bank performance. In this study, qualitative and quantitative approaches were used to identify and analyze the risks faced by BPRS, such as non-current financing (NPF) risk, liquidity risk, and management risk. This research reveals that high financing risks, especially NPFs, can reduce bank performance, as it leads to a decrease in revenue and an increase in operational costs. In addition, poor risk management can lead to financial instability and affect the competitiveness of banks. One of the important factors in risk management is the implementation of capital adequacy ratios (CAR) and financing-to-deposits ratios (FDR) which can reduce liquidity risks and improve bank performance. The results of this study also show that better risk management, through the application of Islamic values-based models such as Al-Adl Financing Risk Management (AFRM), can help BPRS reduce financing risks, maintain financial stability, and increase profitability. The implications of this study show that better risk management is very important in improving the performance and resilience of BPRS in the future, as well as strengthening its contribution to the sharia economy in Indonesia.
Mintarsih et al. (Sat,) studied this question.