THE EFFECT OF MANAGERIAL OWNERSHIP ON THE PERFORMANCE OF ISLAMIC RURAL BANKS (BPRS) IN CENTRAL JAVA, 2020-2023

Abstrak

This study aims to examine the effect of managerial ownership, proxied by the ownership of the board of directors, board of commissioners, and the Sharia Supervisory Board (DPS), on the performance of Islamic Microfinance Institutions at Islamic Rural Banks (BPRS) in Central Java during the 2020–2023 period. The performance of BPRS is measured using three indicators: Return on Assets (ROA), Operational Efficiency Ratio (OER), and Non-Performing Financing (NPF). This research employs a quantitative approach using secondary data obtained from BPRS financial reports registered with the Financial Services Authority (OJK). The sampling method used is purposive sampling, resulting in 22 BPRS as the final sample with 352 observation data points. Data were analyzed using panel data regression through the fixed effect and random effect models with the aid of EViews 12 software. The results indicate that managerial ownership, represented by the board of directors, board of commissioners, and DPS, has a positive influence on ROA. In addition, ownership by the board of directors has a negative and significant effect on NPF, while ownership by the board of commissioners and DPS shows no significant impact. Meanwhile, all three ownership variables show no effect on OER. These findings suggest that managerial ownership plays a role in improving profitability and reducing financing risk, but not necessarily in enhancing operational efficiency