Beyond Profit-Loss-Sharing Labels: Substantive Risk Sharing and Regulatory Gaps in Indonesian Islamic Banking (JURIS (Jurnal Ilmiah Syariah))

Summary

• OJK statistics for February 2024 identify musyarakah as the largest financing category in Indonesian Islamic banking.p.1
• Musyarakah financing was approximately 47.91% of total Islamic banking financing, ahead of murabahah at approximately 43.88%, with the two together close to 92%.p.2
• Genuine productive-sector mudarabah is marginal, shown at about ~1% of total financing (indicative).p.5
• Most reported musyarakah volume is Musyarakah Mutanaqisah (MMQ) home financing, whose periodically reviewed installments make it resemble conventional credit.p.2
• On 4 June 2024 OJK issued the Pedoman Produk Pembiayaan Musyarakah Perbankan Syariah, following a similar 2023 guideline for murabahah.p.6
• The study finds no requirement under POJK No. 65/POJK.03/2016 that banks disclose or limit the gap between a contract's PLS label and its risk-sharing substance.p.8

Key insights

1. The rise of PLS-labelled financing does not necessarily mean a proportional rise in substantive risk sharing.p.1
2. Musyarakah at approximately 47.91% challenges the account of non-PLS dominance, but the share is driven by MMQ home financing.p.2
3. MMQ is formalised in DSN-MUI Fatwa No. 73/DSN-MUI/XI/2008 and is commonly priced with a periodically reviewed fixed rental component.p.2
4. Murabahah (~43.88%) is a fixed receivable independent of business performance.p.5
5. Ijarah, istisna and other contracts make up the remainder of about ~7-8% of financing.p.5
6. OJK's 2024 musyarakah guideline was issued to reduce disputes arising from heavy reliance on two contracts.p.6
7. The findings rest on a single illustrative case and a single-month statistical anchor, so they are a doctrinal diagnosis rather than a demonstrated empirical pattern.p.8