DETERMINANTS OF CREDIT RISK IN THE ISLAMIC RURAL BANKING: CASE STUDY FROM INDONESIA FOR THE PERIOD 2015-2022

Zaimudin Al Mahdi Mokan(1*)

(1) Department of Islamic Economics and Finance, Istanbul Sabahattin Zaim University, Istanbul, Türkiye.
(*) Corresponding Author

Sari


The development and inclusion of Islamic finance have shown a positive trend in Indonesia. The forms of inclusiveness of Islamic finance in Indonesia is carried out through Islamic micro micro-financial institutions under the name Bank Perkreditan Rakyat Syariah (Islamic Rural Banking). Islamic Rural Banking is a micro bank that offers Sharia financial services and transactions like commercial Sharia banking in general, but with a smaller scope and nominal financing and fewer operations and services than the Sharia commercial banking. This study aims to examine the factors that affect financing risk in Islamic Rural Banking in Indonesia in the period from 2015-2022. The data employed in this research was secondary data obtained from the Financial Services Authority's quarterly reports for the 2015-2022 period. This research conducted quantitatively with the data analysis carried out using Ordinary Least Square (OLS) method through SPSS 21st version. The results of the analysis show that simultaneously all variables consisting of Capital Adequacy Ratio (CAR), Return on Assets (ROA), Financing to Deposit Ratio (FDR), and Rate of Efficiency (REO) have a significant effect on the credit risk in Islamic Rural Banking in Indonesia. Partially, the variable Capital Adequacy Ratio (CAR) has a negative insignificant effect on the credit risk, Return on Assets (ROA) has a significant positive effect on the credit risk, Financing to Deposit Ratio (FDR) and Rate of Efficiency (REO) have an insignificant positive effect to the credit risk of Islamic Rural Banking in Indonesia in the 2015-2022 period.


Kata Kunci


Islamic Rural Banking, Non-Performing Financing, Capital Adequacy Ratio, Return on Asset, Financing to Deposit Ratio, Rate of Efficiency Ratio.

Teks Lengkap:

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Referensi


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DOI: http://dx.doi.org/10.31602/.v0i0.12991

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