The average Non-Performing Financing (NPF) of Sharia Microfinance Institutions (LKMS) in 2023 reached 13.09%. This percentage is above the maximum limit of the NPF ratio in LKMS based on POJK no 19 of 2021. Where from various LKMS institutions in Indonesia, Baitul Maal wa Tamwiil (BMT) is the largest LKMS spread around 4,500 units. Compared to Sharia Rural Banks (BPRS) which are only 173 out of a total of 1,553 BPRs in 2024. The urgency of this research reveals that BMT can be an inclusive financial solution with its spread to small areas, which can interact directly with micro communities, such as the perpetrators of Micro and Small Enterprises (MSEs), to farmers. So that NPF is often a problem faced by BMT. So, research related to issues and strategies for resolving NPF in SMFIs is a problem that must be solved. The question is how far are the challenges and strategies of SMFIs in resolving the NPF issue? Thus, the purpose of this study is to analyze the issue of practical problems in resolving NPF in SMFIs in Indonesia, and analyze strategies to minimize the re-occurrence of NPF in SMFIs in Indonesia. To achieve the research objectives, the method used is through a qualitative approach with Analytical Network Process (ANP), which is assisted by “super decisions” software. This method can help decision-making results or a policy in getting the best alternative among the issues and strategies offered by displaying the order of priority. Primary data sources were obtained through forum group discussions (FGDs), pair-wise questionnaires, and in-depth interviews with 10 respondents who are considered experts in related fields, which are divided into regulators, academics and practitioners. The results of this study prioritize the main issues of NPF problems in BMT from internal management, followed by internal HR issues, debtor/customer issues and regulatory issues. While the main priority of the settlement strategy is from the strategy of improving internal management, followed by improving internal human resources, then increasing sharia literacy, and government policy.