Profit And Loss Sharing System and Profitability of Islamic Rural Bank in East Jawa Indonesia

Abstract

This study aims to analyze, prove and find; (a) the effect of the profit sharing system on the risk of islamic rural banks; (b) the effect of the profit sharing system on efficiency of the islamic rural banks; (c) the effect of efficiency on risk of the islamic rural bank; (d) the effect of the profit sharing system on the profitability of the islamic rural banks; (e) the effect of risk on the profitability of islamic rural bank and (f) the effect of efficiency on the profitability of an islamic rural bank. This research is included in the type of explanatory research . This study uses path analysis with the SPSS program to test, analyze and prove the relationship of the influence of independent variables that affect the profitability of the islamic rural banks. This study found that (a) profit sharing system has no significant effect on the risk of the islamic rural banks; (b) the profit sharing system has a significant effect on the efficiency of the islamic rural banks; (c) efficiency has a significant effect on the risk of islamic rural banks; (d) the profit sharing system has no significant effect on profitability of the islamic rural banks; (e) the risk has a significant effect on the profitability of the islamic rural banks and (f) efficiency has a significant effect on the profitability of an islamic rural bank (IRB)