Evaluating The Role Of Maqasid Sharia In The Performance Of Islamic Rural Banks (BPRS)

Abstract

This study evaluates the role of Maqasid al-Shariah in assessing the performance of Islamic Rural Banks (Bank Pembiayaan Rakyat Syariah – BPRS) in Indonesia. Unlike conventional performance models that emphasize financial indicators such as profitability and liquidity, this research applies a maqasid-based perspective to capture the broader ethical and socio-economic objectives of Islamic banking. Employing a library research method, the study systematically reviews contemporary literature, regulatory documents, and empirical findings related to BPRS performance and MaqasidSharia implementation. Comparative insights are drawn from previous studies that applied the Maqasid Shariah Index (MSI) and Maqashid-based Performance Evaluation Model (MPEM), revealing significant variation across BPRS institutions in achieving maqasid dimensions such as intellect, justice, and welfare. The findings indicate that BPRS demonstrating higher engagement in social and environmental programs tend to perform better holistically, achieving a balance between financial sustainability and social welfare. Furthermore, recent regulatory reforms by the Financial Services Authority (OJK) have strengthened governance structures and expanded opportunities for capital growth, reinforcing the alignment between Sharia compliance and institutional competitiveness. This study concludes that the integration of Maqasid al-Shariah as a performance framework enables BPRS to evolve from transactional entities into value-driven institutions that contribute to inclusive and sustainable financial development.