Credit Risk Management in Indonesian Islamic Banking

Abstract

This research aims to analyze credit risk management in the Indonesia Islamic banking industry. Primarily, the credit risk management is related to policies and procedures, credit risk management activities and credit risk controling or mitigating. Research constructed by weighting a number of indicators that reflect credit risk management activities in Islamic banking. The final results of the research are index of credit risk management of the Indonesia Islamic banking industry and indices of credit risk management in the Islamic banking industry. The Index is counted by the method of scoring with the maximum score of 100 and the industrial index is obtained by combining of each Islamic bank through the calculation of weighted average of individual share of financing. Based on the analysis of primary and secondary data, the index of credit risk management of the Islamic banking industry and index aspects of credit risk management, the index of the Indonesia Islamic banking industry come up to a good criterion. Improving the Quality of credit risk management, can be proceded by bank management by improving risk management aspects which have not been adequately assessed. Moreover, improving the quality of credit risk management by the authority of Islamic banking can be pursued by formulating the banking regulations

Keywords

• Credit risk, Risk mitigation, Risk controlling, Islamic banking, Indonesia

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