Rural Banks Research Articles

Analysis of Financial Variables on Conventional BPR Performance

This study aims to analyze the financial ratios of rural banks registered with Bank Indonesia to banking performance. The number of samples used was 10 Conventional Rural Banks located in Java and Sumatra and registered with Bank Indonesia, with a research period between 2010 to 2014. The analysis method used is regression analysis with panel data using an e-views program. The results showed that together the independent variables used in this study had a significant influence on BPR performance while individually the ROA, LDR and NIM variables did not have a significant influence on BPR performance. NPL variables have a positive and significant influence on BPR performance. BOPO variables have a negative and significant influence on BPR performance. The independent variables in this study were able to influence the dependent variable by 60.30%. This shows that together the variables NPL, ROA, BOPO, LDR and NIM are able to affect BPR performance by 60.30%.

Konversi Pada Bank Perkreditan Rakyat (BPR) Menjadi Bank Perkreditan Rakyat Syariah (BPRS) dan Pengaruh Terhadap Kinerja Keuangan Pada PT. BPR Jam Gadang

The Sharia law can work in Indonesia because the Indonesian banking system still adheres to a 2 window system. According to Law No. 21 of 2008 concerning Sharia banking, the 2 window banking principle in Indonesia will end no later than 2023, whereby banks that have been running Sharia business using the Sharia law will be forced to spin off or convert. One of the reasons for the conversion of Conventional Banks into Islamic Banks is the large number of Islamic financial institutions which show enormous potential, as shown by the number of Conventional Banks which have formed sharia divisions. The Islamic banking industry also applies principles that comply with Islamic law and Sharia recommendations. This study aims to see how the Conversion of Rural Banks (BPR) to Sharia Rural Banks (BPRS) and the Effect on the Financial Performance of Jam Gadang. This study uses a qualitative method with a case study approach. With the researcher can get a complete picture of the problems that are formulated by focusing on the process and the search for meaning behind the phenomena that arise in the research process. The method that can be used for this time series analysis is the Least Square Method of linear line equations from time series analysis.

Kinerja PT Bank Pembiayaan Rakyat Syariah (BPRS) Amanah Bangsa Berdasarkan Maqashid Sharia Index (MSI)

The research aims to explain and analyze about PT BPRS Amanah Bangsa performance based on Maqashid Sharia Index. This research used quantitative descriptive approach with secondary data obtained from Sharia Rural Bank financial report that was published by OJK in ojk.go.id website period 2018 – 2020. Data analysis technique that was used in this research is Simpel Additive Weighting method with Multiple Attribute Decision Making approach. The research used three concepts, namely educating individual, establishing justice, and promoting welfare. MSI element that was used in this research, such as education grant, research, training, publicity, fair returns, functional distribution, interest free product, profit ratios, personal income, and investment ratios in real sector. The result of this research showed that PT BPRS Amanah Bangsa hasn’t been maximized because there’re some indicators of MSI hasn’t been implemented by the Sharia Rural Bank. The MSI average value of PT BPRS Amanah Bangsa is 0.0629.

Corporate social responsibility and performance among rural banks in Ghana: the moderating role of governance structures

PurposeThis paper evaluates the effect of corporate social responsibility (CSR) on the performance of rural banks, as well as the moderating influence of effective governance on the surmised nexus.Design/methodology/approachAnnual data for 122 Ghanaian rural banks from ARB Apex Bank, World Development Indicator (WDI) and World Governance Indicator (WGI) for the period 2014–2020 were compiled for analysis. A two-stage system generalized method of moments (GMM) estimator was used in examining the relationships under study.FindingsThe findings suggest that CSR has a significant negative effect on return on assets (ROA), return on equity (ROE) and stability (Z-score). On the other hand, further results showed that CSR positively influences net interest margin (NIM). Again, the results suggest that government effectiveness exerts a positive moderating influence on the effect of CSR on performance from all four measurement criteria (ROA, ROE, NIM and Z-score) in the Ghanaian rural banking sector.Originality/valueThe study focuses on the rural banking sector in the Ghanaian economy, compared to related studies that examine the subject matter for commercial banks. The moderating influence of governance structures is also assessed on the relationships to guide policy on rural banking.Peer reviewThe peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-02-2023-0116.

Pengaruh Pembiayaan Murabahah, Pembiayaan Mudharabah, dan Pembiayaan Musyarakah pada Profitabilitas Bank Perkreditan Rakyat Syariah

This research was conducted to test the effect of sharia financing contracts (Murabaha, Mudharabah, and Musyarakah Financing) on Profitability (ROA) of Harta Insan Karimah Sharia Rural Banks in 2018-2022. The data of Financial Services Authority (OJK) is used as the population with a sample of the financial statements of the Harta Insan Karimah Sharia Rural Bank for the period 2018-2022 (17 samples). The research method in this study is the Ordinary Least Square (OLS) method with quantitative research using multiple linear regression analysis techniques using SPSS version 25 software. The independent variable (X) tested in this study consists of Murabahah, Mudharabah, and Musyarakah Financing. The dependent variable (Y) used in this study is Return on Assets (ROA). The results of the study show that simultaneously, X variables (Murabaha, Mudharabah, and Musyarakah Financing) has no effect on variable Y, namely profitability (ROA) of BPRS Harta Insan Karimah in 2018-2022. Partially, Musyarakah Financing has a positive and significant impact on the profitability (ROA) of Harta Insan Karimah Sharia Rural Banks in 2018–2022, whereas Murabahah Financing and Mudharabah Financing each have a positive and insignificant impact on the Return on Assets (ROA) of BPRS Harta Insan Karimah in 2018–2022.

Affordability of healthy diets is associated with increased food systems performance in Nigeria: state-level analysis

This study examines the relationships between healthy diets’ affordability and food systems performance across Nigerian states. On a composite index (FSI) constructed from key food system components, states in the southern zones perform relatively better than those in the north, whereas a higher share of households who cannot afford a healthy diet was from northern states. Findings suggest the need for more focused attention on resilience building for improved food systems especially in northern Nigeria. Results also indicate cases where unaffordability of a healthy diet remains high in the face of comparatively lower cost and vice versa, highlighting the need for more efficient and equitable food supply systems. Findings of this study further suggest that achieving affordable healthy diets would require stepping up actions to improve, among others, access to basic services (such as good roads and electricity), increased presence of financial services (such as rural banks), greater access to information and communications services (mobile phone subscription rates and increased radio/television station coverage), facilitating more favorable and predictable business environment, and promoting women’s empowerment.

Strategic Analysis of PT Bank Perkreditan Rakyat (BPR) Citra Dana Mandiri

Indonesians are realizing the importance of safe and profitable savings. Thus, bank investment considerations are rising. People invest in People's Credit Banks (BPR) instead of traditional banks. Additionally, BPR provides village loans. Rural Banks (BPR) have helped many SMEs. This study examines PT. People's Credit Bank (BPR) Citra Dana Mandiri's external and internal environment and determines its best alternative strategy. IFE, EFE, SWOT, IE, and QSPM analysis tools are used in this study. Non-performing loans and market share were PT BPR Citra Dana Mandiri's biggest internal strengths. PT BPR Citra Dana Mandiri's biggest weakness was its lack of mobile-banking and 2 branch offices. Vehicle enthusiasts are a major external factor. the growth of MSMEs in Lampung Province, with competitors aggressively pursuing market share and offering credit and facilities. The TAS/Total Activeness Score QSPM, the first strategic alternative PT BPR Citra Dana Mandiri prioritizes, is market penetration. Market penetration can estimate PT BPR Citra Dana Mandiri's potential market

The Effect of Implementing OJK-BOX (OBOX) Application in The Relationship Among NPL, BOPO, and Cash Ratio on The Profitability of Rural Bank (BPR) in East Java

This research aims at empirically prove the effect of financial ratios (including NPL, BOPO, and cash ratios) on ROA and, determine the effect of OJK-BOX application on the relationship between the independent and dependent variables. This research includes 868 samples from 124 Rural Banks (BPR) in East Java and employs multiple regression analysis to test hypotheses 1, 2, and 3, and categorical moderation analysis to test hypothesis 4. The results of the hypothesis testing proved that NPL and BOPO had a negative effect on ROA; cash ratio had no effect on ROA; and the OJK-BOX application affected the relationship between NPL and BOPO on ROA. From these findings, it is proven that the OJK-BOX application program can control the financial risks faced by banks and this research can be used as a reference to assist companies in managing financial risks.
 Keywords: OJK-BOX Application Program; Credit Risk; Operational Risk; Liquidity Risk; Financial Ratios
 
 Abstrak
 Penelitian ini dilakukan untuk menguji pengaruh rasio keuangan (NPL, BOPO, dan cash ratio) terhadap ROA dan melihat apakah aplikasi OJK-BOX memengaruhi hubungan antar variabel independen-dependen. Rasio yang digunakan dalam penelitian ini adalah NPL, BOPO, dan cash ratio dengan total 868 sampel dari 124 BPR konvensional Jawa Timur. Analisis yang digunakan dalam penelitian ini adalah analisis regresi berganda untuk menguji hipotesis 1,2, dan 3 dan analisis moderasi sub-grup atau moderasi kategori untuk menguji hipotesis 4. Hasil pengujian hipotesis dalam penelitian ini membuktikan bahwa NPL dan BOPO memiliki pengaruh negatif terhadap ROA, cash ratio tidak memiliki pengaruh terhadap ROA, dan program aplikasi OJK-BOX mempengaruhi hubungan antara variabel NPL dan BOPO terhadap ROA. Dari hasil temuan ini dibuktikan bahwa program aplikasi OJK-BOX dapat mengontrol risiko keuangan yang dihadapi oleh bank dan penellitian ini dapat menjadi referensi untuk membantu perusahaan dalam pengelolaan risiko keuangan.
 Kata Kunci: Program Aplikasi OJK-BOX; Risiko Kredit; Risiko Operasional; Risiko Likuiditas; Rasio Keuangan

The Effect of NPF, FDR, Bank Size and Covid-19 on MSME Financing of Indonesian Sharia Commercial Banks for the 2018-2021 Period

MSME has a massive contribution to national economic development. In order to expand and strengthen the MSME sector, Islamic Commercial Banks as financial intermediary should consider some of the main factors before distributing their financing to the MSME sector. This study aims to identify and analyze the effect of NPF, FDR, Bank Size, and Covid-19 on MSME Financing at Shariah Rural Banks in Indonesia in the period of 2018-2021 both partially and simultaneously. This study uses a panel data approach where the data needed in this study are from 7 Indonesian Islamic Banks with 112 of total data quarterly. The data was collected from quarterly Islamic bank reports. The results of this study indicate that FDR and Bank Size variables have a positive significant effect on MSMEs Financing at Shariah Rural Banks. Meanwhile, NPF and the dummy variable Covid-19 have no significant effect on MSMEs Financing at Shariah Rural Banks. This study is expected to developing of the grand theory and knowledge on the impact of MSME Financing especially in the Shariah Rural Banks in Indonesia.

Corporate Zakat in Perspective of Stakeholder Theory: A Case Study of Islamic Rural Banks

In Indonesia, potential sources of zakat are grouped into three parts: potential zakat from individual or family groups, potential zakat from companies/industry, and from the results of deposits of zakat funds stored in banks. This study analyzes corporate zakat from the stakeholder theory's perspective with primary and secondary data from Islamic rural banks in the Special Region of Yogyakarta. The data analysis used qualitative from interviews and quantitative descriptive approach from the company report. Conclusions are drawn by describing secondary data, which is deepened through interviews with the directors of Islamic rural banks and relating them to stakeholder theory. The results of this study indicate that corporate zakat is in line with stakeholder theory because it positively impacts the performance of Islamic rural banks in Yogyakarta. Meanwhile, the muamalah approach to corporate zakat law has opened space for ijtihad against zakat law. Another conclusion states that Islamic rural banks that run zakat will improve business performance because the social approach can maintain stronger business relationships.

Preliminary Study on Corruption Case in the Indonesian Banking Sector: Overview of the Fraudster, Loss, and Fraud Modes

The banking sector is the area with the most corruption on a global and national scale (ACFE, 2021; ACFE Indonesia Chapter, 2020). The banking sector itself is a sector that is rigid in terms of regulation and places great emphasis on prudential aspects in its business processes. Bahoo (2020) in his paper states that corruption in the banking sector raises considerations for building an anti-corruption architectural system within banks to eradicate corruption. This preliminary study will describe cases of corruption in the banking sector in Indonesia in a limited period of time. This study uses data from court rulings related to banking corruption cases registered in 2020. The overview of corruption cases shows the central tendency related to the profile of fraudsters, the value of state finance loss, court imprisonment, and the modus operandi of fraud/corruption committed by the perpetrators. The findings show that corruption in the banking sector in Indonesia occurs at State-Owned Enterprises and Local Government-Owned in the form of commercial banks, rural banks and sharia rural banks. The data indicates that in terms of gender, the fraudsters, although still dominated by the male gender, are relatively equal with the female gender where ratio of the male and the female is 6:4. Furthermore, the data indicates that in terms of position or rank of the fraudster, the higher the position of the bank’s internal employee, the greater the value of state finance loss incurred. The results of this study also show that the modus operandi of crimes that often occur is borrowing the name of the debtor, fictitious credit, and collusion in applying for credit. The repeated modus operandi is a challenge for policy managers in designing better systems and governance to eliminate the level of corruption in the banking sector. In the future, it is necessary to expand and enrich data collection and data analysis of corruption cases in the banking sector in Indonesia so that it can provide a better picture.

MILITARY IN POLITICS AND RURAL AREAS DEVELOPMENT ADMINISTRATION IN NIGERIA

At the grant of independence Nigerians were hopeful for socio-economic development. The hope was dashed due to corruption, mismanagement of the nation’s resources by civilian-led administration. The military intervened in the nation’s politics to rescue the poor socio-economic condition of Nigerians.. Consequently, the paper focused on military in politics and rural development by examining the development administration efforts of the military in the development of Nigerian rural areas. The military in politics and its development administration was a rural development strategy to alleviate the suffering of the people living in the rural areas in Nigeria. The paper adopted a historical research method which relied on secondary data and it also adopted direct military participation theory. The paper revealed that the Nigerian military in politics was corrective in nature. The military seized power in Nigeria to change the poor socio-economic and political system. Therefore, the military embarked on several developmental programmes such as the creation of local government, rural banking programmes, the Directorate For Food, Roads and Rural Infrastructure (DIFFRI ), National Directorate for Employment. The paper revealed that undue political interference, unstable cash-flow to finance programme and inadequate qualified personnel to handle some of the programmes/projects constrained the impact of the military development administration efforts in the rural areas. The paper recommended among others that Nigeria government should designed no-stop financing plan for every rural development programme and train adequate rural dwellers to manage some of the needed programmes/projects

Analisis Pengaruh Faktor Spesifik Perusahaan terhadap Profitabilitas Bank Pembiayaan Rakyat Syariah (BPRS) di Indonesia Periode 2016 - 2021

This study aims to determine the amount of the influence of the variables Operational Efficiency Ratio (BOPO), Financing to Deposit Ratio (FDR), Firm Size and Capital Adequacy Ratio (CAR) on Return on Asset (ROA) at Rural Bank Sharia (BPRS) in Indonesia. The population used is BPRS registered with the Otoritas Jasa Keuangan (OJK). The data used is secondary data derived from financial reports issued by OJK for the 2016-2021 period. The research method used is quantitative research with panel data regression analysis. The sample used in this study was 51 BPRS. The findings of this study are to provide contribution to BPRS regarding specific factors affecting the ROA of BPRS in Indonesian; and can be used as a reference and consideration for interested parties.

Pengaruh Capital Adequacy Ratio (CAR), Non Performing Loan (NPL), Net Interest Margin (NIM), Loan To Deposit Ratio (LDR) Dan Biaya Operasional Pendapatan Operasional (BOPO) Terhadap Return On Asset (ROA) Pada Bank Perkreditan Rakyat (BPR) di Kota Batam

This study aims to determine the effect of Capital Adequacy Ratio (CAR), Non Performing Loan (NPL), Net Interest Margin (NIM), Loan to Deposit Ratio (LDR) and Operational Costs Operating Income (BOPO) on Return on Asset (ROA) of rural banks in Batam City. Capital Adequacy Ratio (CAR), Non Performing Loan (NPL), Net Interest Margin (NIM), Loan to Deposit Ratio (LDR), Operational Costs Operating Income (BOPO) and Return on Asset (ROA) are measured from the financial statements provided on Otoritas Jasa Keuangan (OJK) website. The population used in this study was rural banks in Batam City period 2017-2021. This study used 26 companies with purposive sampling as research sample. The analysis technique used is multiple linear regression analysis. The result of this study indicate that partially Non-Performing Loans (NPL), Net Interest Margin (NIM) and Operational Costs Operating Income (BOPO) have a significant effect on Return on Assets (ROA), while the Capital Adequacy Ratio (CAR) and Loan to Deposits Ratio (LDR) have no significant effect on Return on Assets (ROA). Simultaneously, Capital Adequacy Ratio (CAR), Non Performing Loan (NPL), Net Interest Margin (NIM), Loan to Deposits Ratio (LDR), and Operational Costs Operating Income (BOPO) have a significant effect on Return on Assets (ROA).

Determinants of the Profitability of Islamic Rural Banks During Covid-19 in Indonesia

The Return on Asset (ROA) value of Islamic rural banks (BPRS) keeps decreasing during the Covid-19 pandemic, specifically from 2020 to 2021. The ROA value of Sharia Commercial Bank and Sharia Business Unit also decreased in 2020 but increased in 2021. During the pandemic, many financial institutions were in trouble, but BPRS was still able to survive in the midst of a crisis. This phenomenon attracted some scholars to study the factors that made BPRS survive during a pandemic. This study aims to analyze the effect of internal and external factors on Islamic rural banks’ profitability from the second quarter of 2020 to the first quarter of 2022. The sample used consisted of 134 Islamic rural banks with complete data to be analyzed. This study used panel data regression with ROA as the dependent variable. The result of regression shows that partially, FDR has a positive impact on ROA, whereas NPF and OER hurt ROA. On the other hand, CAR, GDP, and CPI have no impact on ROA. The finding shows that the internal factors of the BPRS have an important role in dealing with crises during a pandemic. The government is expected to support the digital transformation of BPRS in order to increase the efficiency and convenience of BPRS, so the public is attracted to join BPRS.

Prosedur Pemberian Pembiayaan Pada PT BPR KARANGWARU PRATAMA

In Indonesia, Law no. 07 of 1992 concerning Banking stipulates two categories of banks: Commercial Banks and Rural Banks. The number of BPRs in Indonesia, according to the Indonesian Banking Statistics Report, totaled 1,552 as of November 2019. Historically, BPRs have existed since the colonial era and have been in contact with small and rural communities. In light of this, the government's policy regarding the establishment of BPRs was facilitated through Pakto 88 and Presidential Decree No. 38 of 1988, which aimed to improve public services. BPRs are currently facing many challenges from the rapidly changing external environment of the industry, including government policies, macroeconomic conditions, competition, and advances in fintech. The purpose of this paper is to analyze the challenges faced by BPR KWP in providing loans and their roles and development efforts, so that BPR KWP continues to develop and play a role in supporting the real sector, especially MSMEs. On the other hand, the changes referred to have indirectly reduced the profitability performance of BPRs over the last five years

The Impact of Marketing Communication and Islamic Financial Literacy on Islamic Financial Inclusion and MSMEs Performance: Evidence from Halal Tourism in Indonesia

The development of halal tourism in Indonesia is the focus of the Indonesian government and MSMEs have an important role in supporting the development of halal tourism in Indonesia. This study aims to examine the relationship between marketing communication and Islamic financial literacy on Islamic financial inclusion and MSME performance in the halal-tourism sector. A covariance-based SEM technique utilizing LISREL software was used to analyze the data from this investigation. Nonprobability sampling was employed to collect the data, and the sample consists of 152 halal-tourism entrepreneurs. This study found a positive and significant association between Islamic financial inclusion and business performance. This study also found that there is a positive and significant association between Islamic financial literacy and Islamic financial inclusion. Marketing communication and Islamic financial inclusion have a positive relationship, but it is insignificant. This study implies that to establish a halal-tourist ecosystem for long-term development in Indonesia, commercial actors must lend their full support. This study demonstrates that they can thrive when MSMEs in the halal-tourist ecosystem are backed by Islamic banking and Islamic rural banks. As a result, a more accommodating approach from Islamic banking is required to provide access to halal finance for business actors in Indonesia’s halal-tourism ecosystem.

Efficiency, Performance, and Potential Improvement of Indonesian Rural Banks During Covid-19 Pandemic

The objective of this study is to examine the efficiency, performance, and scope for enhancement of Rural Banks (BPRs) and Sharia Rural Banks (BPRSs) in Indonesia, particularly in the context of the Covid-19 pandemic, in order to support national economic recovery. The research sample consisted of 77 BPRs and 52 BPRSs in Indonesia over the period of 2016-2020. The analytical approach employed was a non-parametric method called Data Envelopment Analysis (DEA), utilizing secondary data obtained from financial bank statements. The input variables encompassed fixed assets, operational costs, and third-party funds, while the output variables included the amount of financing provided and operating income. The findings of the study reveal a fluctuating trend in the performance of BPRs and BPRSs in Indonesia from year to year. According to the CRS and VRS scores, the efficiency level of BPRs remained stable during the Covid-19 pandemic, whereas BPRSs experienced a decline in efficiency. Consequently, this study concludes that BPRs exhibit superior efficiency compared to BPRSs in Indonesia. Moreover, the analysis of potential improvements indicates that the most significant source of inefficiency lies within the output variables: financing and operating income. Furthermore, benchmarking analysis reveals that the efficiency of both BPRs and BPRSs was higher during the periodof 2016–2019 compared to 2020.

People With Disability and Access To Financial Services: Evidence From Odisha

The purpose of this study is to examine the effects of disability on access to financial services in Odisha. Data for the study were obtained from the Odisha Economic Survey 2021-22. We used an instrumental variable (IV) regression approach to examine the effect of disability on the use of formal financial institutions and mobile money. We find that the likelihood of having access to finances and using any of the financial institutions, or having at least a product/service with a bank reduces for people with disability. Further, our results show that while people with disability are less likely to use commercial banks (6.3%), rural banks (4.8%) and at least one financial service (6.3%), they are 53.7% more likely to use mobile money. Collaborative actions are needed to raise awareness on mobile money and other Fintech solutions, as well as accessibility functions that can support the inclusion of persons with disabilities into the financial system.

The Effect of Financial Ratios to Return on Assets of the Sharia Rural Bank in Surakarta Residence

The Effect of Financial Ratios to Return on Assets of the Sharia Rural Bank in Surakarta Residence