The Implementation of Analytical Hierarchy Process (AHP) Technique in Productive Financing Decision Making (A Case Study on Islamic Banks in East Java, Indonesia)

Abstract

Islamic banks have adopted Islamic principles as the basis for their business activities and in their activities of providing services in payment traffic. Islamic banks generally provide a number of service products for customers, one of which is financing, comprising productive financing and consumer financing. Productive financing from Islamic banking in Indonesia from 2013 to 2015 has increased by 18.33%. Such an increase was due to a feasibility analysis of prospective customers to minimize any potential financing problems. The aim of this study was to determine the primary criteria for productive financing decision-making based on the levels of interest using AHP technique. The result of this study shows that Shariah compliance could be the primary criteria in the productive financing decision making in Mandiri Shariah Bank and Muamalat Bank. Bank Rakyat Indonesia Shariah (BRIS) considers character to be the main criteria in productive financing decision making. The adoption of Shariah compliance as the primary criterion in two Islamic banks shows that those banks have in its operations implemented Islamic principles.