| Summary: | 碩士 === 國立臺北科技大學 === 管理國際學生碩士專班 (IMBA) === 106 === This study aimed to examine the impact of external and internal factors of commercial bank’s credit in Indonesia. The study sample consisted of twelve Indonesian commercial banks during the period 2005-2016. The study used the bank credit as the dependent variable, and six independent variables divided into two headings that are external and internal factors. The external factors are Inflation (INF), Interest Rate (IR), and Gross Domestic Product (GDP) while the internal factors are Deposit (DEP), Capital Adequacy Ratio (CAR), and Loan to Deposit Ratio (LDR).
The results showed that the Inflation (INF) has a negative impact but not significant on the ratio of bank credit facilities, while found that the Interest Rate (IR), and Gross Domestic Product (GDP), Deposit (DEP), and Loan to Deposit Ratio (LDR) have a positive and significant impact on the ratio of bank credit facilities granted by commercial banks in Indonesia. The result also showed that Capital Adequacy Ratio (CAR) has a positive impact but not significant on the ratio of bank credit facilities granted by commercial banks in Indonesia.
This study recommends for the government to initiates measures that will control the Inflation rate (INF) as it has the negative impact to the bank credit in Indonesia. This study also recommends the government to control the real Interest rate (IR) in Indonesia as there is an evidence to suggest that high interest rate will lead to better performance of bank credit in Indonesia. The study further recommends for the governments to initiate policies to increase the amount of Gross Domestic Product (GDP) in Indonesia since it is positively correlated with bank credit distribution. Finally, the study also recommended Indonesian commercial banks to pay more attention to increase the Deposit (DEP), Loan to Deposit Ratio (LDR), and Capital Adequacy Ratio (CAR) as they have the positive impact to the bank credit in Indonesia.
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