MITIGATION AS A MORAL HAZARD SOLUTION IN PROFIT SHARING BASED FINANCING AT GORONTALO BRANCH OF MUAMALAT BANK

This study aims to determine the potential for moral hazard and the solution in profit-sharing based financing at theGorontalo branch of Muamalat Bank. This research was conducted using qualitative methods and data validitytesting using triangulation. Data collection by observation, interview and documentation. The results showed that thepotential for moral hazard behavior in Islamic banking, especially in the Gorontalo branch of the Muamalat bank isdivided into two, namely the moral hazard of the bank officers and the moral hazard of the customers. Moral hazardthat occurs from banks is not careful in channeling financing, to minimize the moral hazard, the bank presents acommittee in the stage of financing distribution to select it. Meanwhile, customer moral hazard occurs when thecustomer is not honest in providing information on the contract, which is information about the value of collateral,business and the value of assets owned, manipulating financial statements in this case is the benefits obtained, anduncooperative customers in returning loans is a form of moral hazard committed by customers and banks. As forminimizing the moral hazard behavior of customers in profit-based financing is to provide solutions in the form of precontractmitigation and post-contract mitigation.