Optimum financing portfolio of islamic microfinance institutions: Indonesia case

Imron Mawardi, Tika Widiastuti, Puji Sucia Sukmaningrum, Muhammad Ubaidillah Al Mustofa

Research output: Contribution to journalArticlepeer-review

Abstract

The purpose of this paper is to analyze the risk-return of financing and find the optimum financing instruments portfolio of Islamic microfinance institutions (IMFI).The optimum portfolio financing is determined by the minimum coefficients of variation of financing instruments portfolio, namely Murabahah, Mudharabah-Musyarakah, and Ijarah. The methodology of this study is quantitative, which is using risk and return theory to compute risk, return, variance, and coefficient of variation of financing instruments portfolio. The solver program of Microsoft Excel is used to find the optimum combination and composition of financing portfolio. This research found that ijarah financing has the highest return.

Original languageEnglish
Pages (from-to)268-274
Number of pages7
JournalUtopia y Praxis Latinoamericana
Volume24
Issue numberExtra5
Publication statusPublished - 2019
Externally publishedYes

Keywords

  • Financing portfolio
  • Islamic microfinance institution
  • Mudharabah-musyarakah
  • Murabahah

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