Analysis of Determinants of Credit by Commercial Banks to Indonesia’s Fisheries Sector from the Demand Side

Abstract

The growth of financial institutions such as banks is crucial to a country's economy. Not only as a source of financing, is banking also able to influence the business cycle of the economy as a whole. Moreover, Indonesia is a developing country that requires development in various sectors. Credit is an effective financing solution and is quite reliable in terms of financing. However, as one of the most potential sectors, the fisheries sector is actually one of the ones that has minimal credit allocation. This phenomenon occurs because it is influenced by several factors, including external and internal factors. In line with this, this study wants to see what influences credit disbursement when viewed from the demand side by making GDP, credit interest rates, and inflation variables. The method used is the quantitative method of the ECM (Error Correction Model) model, which is processed using Eviews 12. From this study, it is known that GDP and inflation have a significant positive effect in the long term, and the lending rate has a significant negative effect on lending. In the short term, GDP, lending rates, and inflation simultaneously have no effect on credit.