Factors influencing non-performing financing (NPF) financial strategies from the perspective of bank collectors

Non-Performing Financing (NPF) is a pressing issue; it can severely jeopardise the solidity and endurance of Islamic banks. It means facilities for being overdue or stopping payment that lead to decreased liquidity, lower profit-making and losing the public confidence. The question is particularly important in Islamic finance because Shariah-compliant contracts are based on principles of risk sharing, asset-backing, and ethical financial behaviour. NPF are characterised by these characteristics that demand more advanced stages of credit risk treatment, making it a complex problem. Problems related to the continuous increase in NPF will undermine the operational soundness of Islamic banks and growth of the economy, indicating the immediate requirement of investigation in this regard. This study explores what causes NPF and the approaches and barriers to its recovery from the perspective of Debt Recovery Officers (DROs). The study adopted a qualitative explorative method, conducting semi-structured interviews with five (5) officers of Bank Rakyat Recovery Centre in Kulai, Johor based on purposive and snowball sampling methods, who are experienced officers in the field. Based on a thematic analysis, it was found that economic and external challenges, behavioural and lifestyle influences, policy and institutional impact, and awareness and financial literacy were the main drivers. Recovery efforts are hindered by regulatory inefficiencies and protracted legal processes. The study callsfor a robust regulatoryframework, improved borrower financial literacy, and a more flexible, systematic approach to credit risk management