PROBLEMS OF MUDHARABAH FINANCING IN ISLAMIC BANKING AFTER THE IMPLEMENTATION OF QANUN OF ISLAMIC FINANCIAL INSTITUTIONS IN ACEH

Abstract

The mudharabah contract has become one of the Islamic banking products legitimated by The National Sharia Board and Financial Services Authority. The Aceh government, through the Qanun of Islamic Financial Institutions, has emphasized that banking practices in Aceh must rely on sharia principles. The consequence of this regulation is that banks are only allowed to use sharia contracts in every financial and financing transaction. This research is an empirical juridical study with a sociological and normative approach. This approach was employed to analyze the use of mudharabah contracts from both practical and theoretical aspects. The results of this study indicate that although the mudharabah contract has been designated as one of the financing products in Islamic banking, the mudharabah contract is not fully applied for financing. The mudharabah contract is only implemented for corporate purposes, not for small traders. This is due to several things, including the high risk in mudharabah financing, low bank confidence in customers, fluctuating profits, and low-risk management. This study aims to analyze the problems of mudharabah financing after implementing the 2018 Qanun of Islamic Financial Institutions in Aceh. The results of this study can answer the main problems in the mudharabah contracts. Thus the mudharabah contract can be optimized in the financing system of Islamic banking in Aceh.