<![CDATA[Non-Performing Loans (NPLs) represent one of the primary indicators of credit risk affecting the financial soundness of banking institutions. High NPL levels can reduce profitability, threaten banking stability, and hinder economic growth. This study aims to analyze the effects of inflation, Gross Domestic Product (GDP), Loan to Deposit Ratio (LDR), and bank size on the NPLs of Conventional Rural Banks (Bank Perekonomian Rakyat) in Central Java, both individually and simultaneously. This research employed a quantitative approach with a descriptive research design. The sample consisted of 69 Conventional BPRs in Central Java selected through purposive sampling. Secondary data were collected from BPR published financial reports, the Financial Services Authority (OJK), Statistics Indonesia (BPS), and the official websites of the respective BPRs. Panel data regression analysis was conducted using E-Views 13, preceded by classical assumption tests, including normality, heteroscedasticity, multicollinearity, and autocorrelation tests. The results indicate that inflation, LDR, and bank size have negative but statistically insignificant effects on NPLs, while GDP has a positive and statistically significant effect on NPLs. These findings suggest that during the observation period (Q4 2024–Q2 2025), stable inflation, liquidity management, and bank size were not the primary determinants of changes in NPLs. In contrast, higher GDP was associated with an increase in NPLs, indicating that stronger economic growth may have encouraged more aggressive lending activities, thereby increasing credit risk. Simultaneously, inflation, GDP, LDR, and bank size were found to have a significant effect on NPLs in Conventional Rural Banks in Central Java.]]>
