111 American Journal of Economic and Management Business e-ISSN: 2835-5199 Vol. 2 No. 4 April 2023 ANALYSIS OF MUDHARABAH FINANCING ON CUSTOMER BUSINESS IMPROVEMENT IN 2022 PERIOD Rudi Hartono, Mamluatun Ni’mah, Cici Widya Prasetyandari Universitas.Islam Zainul Hasan .Genggong, Probolinggo, Indonesia Email: UdieyDoremi@gmail.com Abstract In the digital era, sharia banking is growing rapidly and has become a reference for the community in managing funds for various aspects of community needs. In this case, the public must understand the various products of BSI (Bank Syariah Indonesia), one of which is applying a mudharabah contract on savings or other products. In this article, the author wants to discuss the analysis of mudharabah financing on increasing customer businesses. Then the research method used is descriptive qualitative, namely by observing and interviewing one of the employees of the Indonesian Islamic Bank (BSI). and fund owners. In this case, the owner of the fund does not place any restrictions on the customer, in order to run the type of business that will be managed, the period of time, and the area of the business does not violate sharia principles and fulfills all aspects and provisions of the bank. Keywords: Increasing; Customer Business; Islamic Banking. This article is licensed under a Creative Commons Attribution-ShareAlike 4.0 International INTRODUCTION In the current era, many people are choosing to use financial institutions to support transaction activities such as trade and the economy, seen from the function of the bank itself is an institution that facilitates the community and can launch the community in the payment mechanism. (Bintarto, 2022) A bank is a financial institution that accepts savings and loans for money, in order to provide public facilities for the public regarding business finance. in this case explained in the Law of the Republic of Indonesia, a bank is a form of business entity that facilitates credit and non-credit funding in order to facilitate the lives of many people (Wiwoho, 2014). Bank syariah indonesia (BSI) is one of the banks that has a very large impact on the turnover of a community's business. BSI is a financial institution for the public to save and borrow money. Bank BSI has become a necessity of life. There are also many people who want to develop their business but the biggest problem is in the funding section, so from this the bank can be a way for financial problems and community business and has a negative side, which is like the usury system commonly called interest. There is also a public need for banks that carry out their activities in accordance with sharia principles. (M. Damayanti, 2022) https://creativecommons.org/licenses/by-sa/4.0/ https://creativecommons.org/licenses/by-sa/4.0/ https://creativecommons.org/licenses/by-sa/4.0/ American Journal of Economic and Management Business Vol. 2 No. 4 April 2023 112 One of the existing products bada BSI has different characteristics from other financial institutions, one of these products is the Mudharabah product. The Mudharabah is a financing program issued by Bank Syariah Indonesia in an important role for small entrepreneurs. Mudharabah financing is working capital financing to overcome the difficulties of the community in developing a business, so this is considered to prevent a deterioration due to the absence of interest determination that must be paid to the bank. (Primary, 2022) Based on the explanation above, the background of the problem can be formulated as the main problem of discussion, namely: how to develop the business of people who want to develop their business but the biggest problem is in the fund section (Alshater et al., 2022) Benefits of the research: can add knowledge about financing so that we can learn how the process of community business development, especially in the micro business section of the community, this research is expected to be a great benefit for the community so that the community can develop in their business fields (Fianto et al., 2019). Mudharabah financing is an agreement between two parties where one party provides capital (shohibul mal) and the other party (mudharib) empowers capital to be managed so that it gets a percentage finance (Latif, 2020). The bank (shahibul maal) is obliged to provide 100% funds to customers (mudharib) and mudharib only manages businesses that have been determined by shahibul maal. And for the distribution / profit will be divided based on the agreement at the beginning of the contract. Technical mudharabh financing in Indonesian sharia banks is financing intended to finance investment, working capital and the provision of profit sharing calculation facilities using revenue sharing, due to the risks involved in Bear less loss. The income of the owner of capital depends on the uncertainty of the business and the costs incurred in the process (Romano et al., 2001). In Law No. 10 of 1998 concerning amendments to Law No. 7 of 1992 concerning banking, it is stated that the business activities of Islamic banks are providing financing or carrying out other activities based on sharia principles, In accordance with the provisions set by Indonesian sharia banks, financing based on sharia principles is the provision of money or bills that are equated with it based on an agreement or agreement between Banks with other parties financed for rewards or proceeds. Islamic banking is a financial business that prioritizes morals, ethics, honesty, fairness and problems when compared to financial benefits. RESEARCH METHODS This research uses descriptive qualitative (Kim et al., 2017). guana to carry out the development of science within the scope of financing. This qualitative research is the result of observations in the field based on the process of observation that we cannot predict in people's lives. This research is descriptive in the field In this research program conducted at BSI KCP PROBOLINGGO SOETTA, the scope of this research discusses the analysis of mudharabah financing for customer business improvement in 2022, where data collection techniques are by conducting interviews with one of the staff employees at BSI KCP Probolinggo Soetta. Qualitative research begins with ideas expressed with research questions, research questions that will later find data collection methods and how to analyze them. Addition, and replacement during the process of its analysis, Rudi Hartono, Mamluatun Ni’mah, Cici Widya Prasetyandari 113 The purpose of this study is: to find out the various needs of the community in developing their business to use mudharabah financing. Benefits of the research: it can add knowledge about financing so that we can learn how the process of community business development, especially in the micro business section of the community, this research is expected to be a great benefit for the community so that the community can develop in their business fields (Idayu et al., 2021) The procedure for obtaining the right data in qualitative research is as follows: a) Researchers limit research to sumsi greetings and characteristics. b) Researchers use a qualitative approach in their research. c) Researchers began the study with one focus. d) Research contains detailed methods, appropriate approaches in data collection, data analysis, and report writing. e) Researchers analyzed the data using separation at several levels. f) Researchers write persuasively, so readers can feel the same experience. g) Research process with qualitative approach. RESULT AND DISCUSSION . Flowchart 1 Mudharabah financing scheme Complete mudharabah financing requirements Application for mudharabah financing Analysis and evaluation of mudharabah financing by institutions Decision on financing application Decision on financing application received Mudharabah financing decision rejected Notification of approval of financing application Notify the applicant of the refusal of financing Mudharabah financing agreement Realization of easy financing disbursement American Journal of Economic and Management Business Vol. 2 No. 4 April 2023 114 Based on the results of the research obtained above regarding the general provisions of the mudharabah financing scheme at BSI KCP Probolinggo Soetta as follows: The amount of capital handed over to the customer as the fund manager must be handed over in cash and can be in the form of money or goods whose value is expressed in units of money, the results of the management of mudharabah financing capital can be calculated by, namely: a. Calculation of project revenue (revenue sharing) b. Calculation of project profits (profit sharing) 1. The results of the business are divided according to the agreement in the contract, at each month or time that has been agreed. The Bank as the capital owner bears all losses except due to negligence and irregularities on the part of the customer, such as misuse of funds, 2. The Bank has the right to supervise the work but has no right to interfere with the customer's work/business affairs. If the customer defaults intentionally, for example not wanting to pay obligations or delaying payment of obligations, then he can be subject to administrative sanctions. Understanding Mudharabah The mudharabah financing has enormous benefits for the community. The benefits of the mudharabah can help the community or MSMEs can use this financing to add to the community for their business capital, and which is clearly not with very large interest, mudharabah financing is a distribution of funds to the community based on an agreement, using a profit-sharing method that has been agreed upon by both parties. Related to the financing, researchers will discuss the analysis of mudharabah financing for increasing community business. (Fadhila, 2015) In general, Mudharabah is divided into two parts, first is mudharabah muqayyadah, is a mudharabah contract in which the shahibul maal or fund owner limits the types of business of the customer. While the second division, is mudharabah muthlaqah, is a contract that is applied to fund owners and customers, and fund owners do not limit the specifications of any type of business. (Sari, 2021) The current mudharabah financing mechanism is very different from the financing procedure in the past. The concept of mudharabah financing is currently not only spurred by the installment mechanism on the main capital payments provided by the bank to the manager. And for the payment mechanism regarding profit sharing, which is done only once at the end of the period. At bank bsi, especially Bsi Kcp Probolinggo Sowetta, the marketing strategy used prioritizes customer comfort and trust in the services provided to customers so that both parties also benefit from this mudharabah financing. Concept Mudharabah Along with the current times, the provisions of the contract have also undergone reforms, the mudharabah contract is an agreement only carried out with one type, it can be seen from the form of cooperation that cannot be combined with other types of contracts, but the concept that exists today, mudharabah has the advantage of being combined with other contracts, such as murabahah or musyarokah contracts, With the merger of these contracts, it aims to be able to create equality, in this case in order to meet the needs of the community to get good bank services. It cannot be seen from the cooperation alone, but also the development and also the concept of mudharabah that is applied today, because it can affect the installment mechanism carried out by the manager related to the financing received. In this concept, it is explained that the application for the payment of principal capital can only be made once at the end of the contract. (Prabowo, 2009) Pillars of Mudharabah contract Rudi Hartono, Mamluatun Ni’mah, Cici Widya Prasetyandari 115 Types of mudharabah contracts As explained earlier, the concept of mudharabah in banks has now entered a fairly rapid development. The concept of its application when the development has been used to facilitate the needs of the community as a whole, in this case mudharabah has two types of contracts that can be used, namely as follows: 1. Mudharabah mutlaqah Mudharabah mutlaqah, is a mudharabah contract whose understanding of the contract is a contract that spurs on the owner of the fund, in order not to determine the type of business that will be built by the fund manager. Based on the agreement from the beginning that has been mutually agreed, the mudharabah mutlaqah contract, a valid contract in cooperation. 2. Mudharabah muqayyadah Mudharabah muqayyadah, is a contract that explains the cooperation agreement, which has been determined by the owner of capital. The agreement is a contract that can regulate the role of capital owners to be able to take advantage of their type of business. Akad mudharabah muqayyadah is also set for the needs of financial managers through Islamic banks. The pillars of determining mudharabah are as follows: a. Shigat (ijab and qabul) b. Two parties who will perform the contract c. Possessions d. Work e. Advantage The legal terms of the contract of mudhrabah menurut sayyid sidiq are as follows: a. The capital to be provided must be in the form of cash. b. Customers who make contracts, are able to do tasharruf, c. Capital can be clearly known, so that it can be distinguished between trading capital and profits. d. The advantage that will be obtained by the manager is that it must be a real percentage. e. Doing ijab and qabul to investors, if in the future there is a profit, it will be divided into two. f. Fund owners do not enter into contracts with fund managers in certain countries. (Sari, 2021) Implementation of the implementation of the mudharabah agreement for the customer's business The implementation of the mudharabah contract in Indonesian Islamic banks, there are changes when viewed from the concept of mudharabah in the past, the concept of the current mudharabah contract can be combined with other contracts, such as murabahah contracts, changes that exist today can adjust to the needs of today's society. The concept of mudharabah currently has the application of installments in the payment of the principal capital that has been managed, ( sekar kirana Damayanti, 2022). The requirements for prospective mudharabah customers at Bank Syariah Indonesia (Bsi) are: 1. Fulfill keriteria as a customer of Islamic banks. 2. Prospective customers must have a current account (bank bsi) 3. The business of prospective customers can comply with sharia principles that do not deviate from sharia teachings. 4. Prospective customers can complete the requirements and attach documents to the bank. 5. Prospective customers of Islamic banks have at least run their business 2 years before becoming mudharabah customers. To get mudharabah financing at BSI KCP Probolinggo Soetta, you must go through the following procedures: 1. Apply for mudharabah financing and fill out the financing form provided by the bank, as well as prepare the requirements that have been determined by the bank. American Journal of Economic and Management Business Vol. 2 No. 4 April 2023 116 2. Regarding the information requirements contained in the financing form, it will be checked by the bank, if there is a lack of information or requirements, the bank will ask for the lack data to prospective customers. 3. Conduct interviews with prospective customers, regarding the purpose and purpose of financing mudharabah. ( sekar kirana Damayanti, 2022) The following is the impact of mudharabah financing on improving the customer's business or economy as follows: 1. Mudharabah financing can help customers' efforts, in mudharabah financing has family values, 2. Mudharabah financing contributes to a fair income. 3. Mudharabah financing can empower community businesses productively in the Probolinggo area. The purpose of financing carried out by Islamic banks, in order to increase community business, to provide funds for community business management, can increase productivity and can be a distribution of community income. (Huda, 2020) Mudharabah Financing Analysis Mudharabah financing is a cooperation based on the principle of profit sharing between two parties where all capital is provided by one party and managed by the other. Mudharabah is a partnership agreement based on the principle of profit sharing on the one hand providing capital to the other party for the business and its managers and both parties share the profits or bear losses simultaneously in accordance with the profits obtained from customers. The mudharabah contract has pillars and conditions, namely the owner of funds and fund managers, ijab qabul in the contract, capital and profit sharing carried out deliberately. Mudharabah financing makes profits increase from the results of financing guided by the rules applied by Islamic sharia. Income from financing will affect the income of Islamic banks that have channeled funds from the public and to the community. Financing distributed to customers will indirectly bring various risks. Risk in financing is usually referred to as net perfoming financing. The impact of mudharabah financing on the community is as follows: 1. Improve the quality of human resources and managers to become professionals, and trustees so that they are more intact and resilient in fighting and trying to face global challenges. 2. Organize and mobilize funds so that funds owned by the community can be optimally useful inside and outside the organization for the benefit of the community. 3. Develop community employment opportunities. 4. Strengthening and improving the quality of business and market products of society, strengthening and improving the quality of community economic institutions. In addition, the existence of mudharabah financing can help the community to drive the economy and social of many communities and become the spearhead of implementing the Islamic economic system. It also became a link between the aghnia (rich) and the du'afa (poor) CONCLUSION Based on the results of existing research at Bank Syariah Indonesia (BSI KCP Probolinggo Soetta) it can be concluded that the financing used to improve the customer's business is mudharabah, as seen from the work strategy in the mudharabah, that is, the owner of the fund does not provide restrictions or provisions regarding the development of the customer's business, as long as it does not conflict with sharia principles. With the mudharabah contract can change MSMEs in Probolinggo, financing using a mudharabah contract can help preserve community income. Mudharabah financing can encourage the improvement of community business, therefore, in mudharabah there is family value. There are also people who want to develop their business but the biggest problem is in the fund section, so that's where mudharabah can be one way for the community to develop their business. 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Masalah-Masalah Hukum, 43(1), 87–97. Copyright holders: Rudi Hartono, Mamluatun Ni’mah, Cici Widya Prasetyandari (2023) First publication right: AJEMB – American Journal of Economic and Management Business