The Effect of BI Rate, Exchange Rate, Inflation and Third Party Fund (DPK) on Credit Distribution and Its Impact on Non Performing Loan (NPL) on XYZ Commercial Segment Bank

Jerimieus S Sinaga,Amlys Syahputra Silalahi,Iskandar Muda

doi:10.13189/ujaf.2020.080301

Jerimieus S Sinaga, Amlys Syahputra Silalahi + Show 1 more

Open Access

https://doi.org/10.13189/ujaf.2020.080301

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Abstract

Along with the level of development of the times, the development of the business world in Indonesia has entered the era of globalization which has resulted in the opening of markets in Indonesia to compete with foreign competitors through trade. Based on the financial ratios and policies of banks that want to review the health of their banks, the measures that must be considered are Macroeconomics, namely the exchange rate, inflation, Central Bank of Indonesia (BI) rate, lending, namely the size of the value of the credit channeled, Collectability is the size of Non-Performing Loans (NPL) and Fund Raising. The Purpose of This Research is to Influence BI Rate, Exchange Rates, Inflation and Third Party Funds (DPK) On Credit Distribution and the Impact on Non-Performing Loans (NPL) At Bank XYZ Commercial Segment. The research method used is a method with a quantitative research approach, while the type of research is descriptive and verification research. To test the research hypothesis, the Path Analysis method is used. Partially the BI rate and Third Party Funds (DPK) have a significant effect on lending, while the exchange rate and inflation have insignificant effects on lending at the commercial segment Bank of XYZ. In addition, the exchange rate and DPK have a significant influence on NPL, while the BI rate, inflation and lending have not significant influence on NPL in the commercial segment Bank of XYZ.

Highlights

One of the benchmarks of national development is economic development in which the economic sector has always been the focus of the government in implementing both short and long term development
From the results of this test it was found that the effect of the Bank of Indonesia (BI) rate directly on credit distribution has an influence with a coefficient of 1.09 where the increase in the BI rate will have an impact on the increase in lending in the commercial segment
From the results of this test it was found that the effect of the BI rate directly on the Non Performing Loan (NPL) has a negative effect with a coefficient of 2.30 where the increase in the BI rate will have an impact on the decline in NPLs

Summary

Introduction

One of the benchmarks of national development is economic development in which the economic sector has always been the focus of the government in implementing both short and long term development. That the crisis has passed, improving the economic sector remains a top priority. Economic development cannot be separated from the development of various kinds of financial institutions. One of the financial institutions which seems to have the biggest role in economic development is the bank's financial institutions, which are commonly called banks (Syahyunan et al, 2017). At present the lending trend is very tight and difficult, it is indicated by macro and micro economic factors. Researchers want to examine several macro factors in the form of the effect of exchange

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