Loan Supply and Demand in Rural Regional Bank: Evidence from Indonesia

Rofikoh Rokhim (Department of Management, Faculty of Economics and Business, Universitas Indonesia Depok, Indonesia)
Nadia Listiyani (Department of Management, Faculty of Economics and Business, Universitas Indonesia Depok, Indonesia)

International Journal of Small and Medium Enterprises and Business Sustainability
Vol. 2 No. 4 (2017): November

This study tries to identify the impact of third party funds, average lending rate (ALR) of working capital, non-performing loans (NPLs), and gross domestic regional products (GDRP) on loan supply in Rural Regional Banks (RRBs). In addition, this research also analyzes GDRP, region’s inflation, and ALR of working capital that influence loan demand of RRBs. This study uses panel data and regression method with random effect model from regional and time differences. The study proves that third party funds, ALR of working capital, NPL, and GDRP simultaneously have significant affects on the loan supply. Then GDRP, region’s inflation, and ALR of working capital simultaneously affect the loan demand.