<![CDATA[This study investigates the impact of financial institution pressure ratios, intermediation, and efficiency on financial distress in Rural banks in Indonesia, vital for economic stability due to their role in serving underserved communities. The objective is to analyze how Non-Performing Loans, Capital Adequacy Ratio, Liquid Assets to Total Assets, Loan to Deposit Ratio, Net Interest Margin, and Operating Expenses to Operating Income influence financial distress, measured by the Interest Coverage Ratio. The research uses data from 639 Rural banks over 2014–2023, totaling 6,390 observations, sourced from the Financial Services Authority. Binary logistic regression was employed for analysis. Findings reveal that Non-Performing Loans and Operating Expenses to Operating Income significantly increase the likelihood of financial distress, while Capital Adequacy Ratio, Liquid Assets to Total Assets, Loan to Deposit Ratio, and Net Interest Margin significantly reduce it. The model demonstrates strong predictive power with 88.2% classification accuracy and a Nagelkerke R Square of 0.701. These results underscore the importance of managing credit risk and operational efficiency to enhance financial resilience. The study offers critical policy implications for regulators and bank management to mitigate risks and strengthen the financial health of Rural banks, supporting sustainable economic growth.]]>
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