Non Performing Loans on Regional Development Bank in Indonesia and Factors that Influence

Abstract

This study aims to analyze the non-performing loan (NPL) in the Regional Development Bank (BPD) in Indonesia and determine the factors that can influence it. This study uses a quantitative approach. The data used in the form of panel data from the financial statements of Regional Development Bank in Indonesia as many as 26 banks 2009-2013. Factors examined its effect on the NPL is a measure of a bank (SIZE), the capital adequacy ratio (CAR), the level of bank efficiency (BOPO), the loan interest rate (LIR), and liquidity (LDR). Estimation model used is the Random Effects Model (REM) with the analytical technique used is multiple regression. The results showed that the NPL BPD 2:14% average is still within the tolerance limits set by Bank Indonesia. Variables that significantly affect the NPL is the level of efficiency of banks, mortgage interest rate and liquidity of banks. While the variable size of the bank and Modak adequacy ratio has no significant effect on the level of NPL.

DOI: 10.5901/mjss.2015.v6n4p280