<![CDATA[The development of Sharia Rural Banks (Bank Perekonomian Rakyat Syariah—BPRS) plays a strategic role in promoting profit-sharing-based financing, particularly musyarakah financing. However, fluctuations in financial performance and financing quality have led to differences in the capacity of BPRS to channel such financing. This study aims to analyze the effects of Total Assets, Third Party Funds (DPK), and Non-Performing Financing (NPF) on musyarakah financing, with Return on Assets (ROA) as a mediating variable, in BPRS in Indonesia. This study employs a quantitative approach using panel data derived from BPRS financial reports published by the Financial Services Authority (Otoritas Jasa Keuangan/OJK) during the 2020–2024 period. The analytical methods applied include panel data regression, path analysis, and the Sobel test to examine the mediating role of ROA. The results indicate that, partially, Total Assets have a positive and significant effect on ROA, Third Party Funds have a significant negative effect on ROA, and Non-Performing Financing has a significant effect on ROA. Simultaneously, Total Assets, Third Party Funds, and NPF significantly influence ROA, with very strong explanatory power. Furthermore, ROA is proven to have a positive and significant effect on musyarakah financing. The intervening variable analysis reveals that ROA is able to mediate the effects of Total Assets and Non-Performing Financing on musyarakah financing, but it does not mediate the effect of Third Party Funds. This study concludes that internal bank factors particularly asset size, financing quality, and profitability are the main determinants in promoting musyarakah financing in Sharia Rural Banks in Indonesia.]]>
