A comparative analysis of rural banks’ efficiency between Bali and West Java provinces in Indonesia

Anwar, Mokhamad; Nidar, Sulaeman Rahman; Komara, Ratna; Layyinaturrobaniyah, Layyinaturrobaniyah

doi:10.1080/20430795.2020.1735220

Cited by 9 publications

(7 citation statements)

References 15 publications

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“…By using the Data Envelopment Analysis (DEA) method, it was found that the average efficiency of the BPRS in each region has not yet reached the optimal level of efficiency. The author also found another study that compared BPR between provinces, namely the research of Anwar et al (2020). By comparing 212 BPRs in West Java Province and 134 BPRs in Bali Province, it was found that the average efficiency of BPRs in Bali was higher than BPRs in West Java during the observation period.…”

Section: Previous Researchmentioning

confidence: 92%

“…Many studies related to the efficiency of BPRs and BPRSs in Indonesia have been carried out before, including a study from Nugrohowati (2019) which analyzed the efficiency level of BPRS in Indonesia with regional zones in the 2012-2015 period. Anwar et al (2020) conducted a comparative analysis of the efficiency of BPRs in West Java and Bali. Hasbi and Apriyana (2021) analyzed the efficiency comparison of BPR and BPRS in West Java.…”

Section: Introductionmentioning

confidence: 99%

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The Efficiency of BPR/S Industry in Sumatra, Indonesia

Mimma

Maulida

2022

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Financial institutions are one of the sectors that play a vital role in national and regional economic growth. BPR and BPRS are one of the banking financial industries that play a role in providing financial services to people with a weak economy and MSMEs, so it is necessary to accelerate improvements in BPR and BPRS. This study aims to measure the efficiency and performance of BPRs in Sumatra, see the impact of the pandemic on BPR and BPRS operations and conduct regional analysis on BPRs and BPRS in Sumatra. Using a sample of 30 BPRs and 30 BPRS in Sumatra, this study conducted observations during the 2016-2021 period. This study uses the Data Envelopment Analysis (DEA) analysis method with secondary data sourced from the financial statements of each BPR and BPRS. The input variables in this study are fixed assets, operating expenses and third-party funds. Meanwhile, the output variables of this research are the financing provided and operating income. The results of the study revealed that the average BPR and BPRS in Sumatra during the 2016 to 2021 period fluctuated. Then, in the CRS and VRS analysis, Lampung and North Sumatra regions have the highest efficiency compared to other regions. Meanwhile, during the Covid-19 pandemic, both BPRs and BPRS in Sumatra experienced a significant decrease in efficiency. This study also analyzes potential improvements to improve programs that cause inefficiencies in the input and output variables. In general, the causes of inefficiency of the two types of banks are operating income and the amount of financing provided. This study also provides recommendations to BPR-BPRS practitioners, regulators and academics as a basis for decision making in achieving optimal efficiency for future.

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Section: Previous Researchmentioning

confidence: 92%

Section: Introductionmentioning

confidence: 99%

The Efficiency of BPR/S Industry in Sumatra, Indonesia

Mimma

Maulida

2022

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“…This means that the credit risks faced by banks affect the level of banking efficiency. This could happen because banks which channel more financing to the public will face greater risks (Anwar et al, 2021). Nevertheless, such banks can maintain their profitability and efficiency, supported by sufficient capital.…”

Section: Tobit Regressionmentioning

confidence: 99%

Efficiency Comparison between Conventional and Islamic Rural Banks in Sumatra during the COVID-19 Pandemic

Akbar,

Ikhwan,

Riani

2023

MBER

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This study aims to examine and compare the efficiency of conventional rural banks and Islamic rural banks in their roles as intermediary institutions during the COVID-19 pandemic in Sumatra, Indonesia. Furthermore, the efficiency determinants were further analysed to find some variables that affect rural banks’ efficiency. Non-Parametric approach, Data Envelopment Analysis (DEA), and Tobit Regression are employed in this study. The results show that Islamic rural banks have better efficiency performance compared to conventional rural banks, but that there is a fluctuating efficiency trend experienced by both types of rural banks during the observation period. In addition, the potential improvement result indicates that financing and operating revenue variables are the main causes of rural bank inefficiency. Furthermore, the Tobit Regression result finds that capital and bank size significantly improve the efficiency level, but that risk significantly reduces bank efficiency.

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“…Besides, it will be a serious threat to the bank's performance if there is no solution to recover their bad loans, rendering them unable to get the loan to be repaid in full. Some of the studies that include NPL in their investigation are Ramli et al [5], Hamid et al [6], Louhichi and Boujelbene [7], and Anwar et al [8].…”

Section: Introductionmentioning

confidence: 99%

“…According to Nguyen [7], a two-stage DEA model is better than a single-stage DEA model in evaluating operating performance, as it informs the management which area in the inefficient company is facing problems either in the first stage of absorbing resource or in the second stage or spending resource. After computing the efficiency score, it is pertinent to measure the extent of the relative inefficiency of decision making units (DMUs) and to explore the areas that bring improvements to their efficiency [8]. Therefore, this paper aims to measure the performance of commercial banks in Malaysia by considering the NPL using a two-stage data envelopment analysis (DEA) model and then, provide the suggested values for the selected input and output variables in order to improve the inefficient DMUs towards becoming fully efficient banks.…”

Section: Introductionmentioning

confidence: 99%

Commercial Banks’ Performance In Malaysia Based On Non-Performing Loan (NPL) Using Two-Stage Data Envelopment Analysis (DEA) Model

Ramli¹

2020

IJATCSE

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Although single-stage Data Envelopment Analysis (DEA) models with undesirable input-output have been extensively studied, there still lacks more systematic investigation of a two-stage DEA model with undesirable variables such as non-performing loan (NPL) in Malaysia. The NPL concept has been widely discussed by economists since the economic downturn in 1997, which had immense impacts on many countries, including Malaysia. This paper studies the performance of commercial banks in Malaysia from 2013 to 2017 using a two-stage Data Envelopment Analysis (DEA) model. The main objective of this paper is to measure the performance of commercial banks in Malaysia by considering NPL and next to determine the suggested value for the selected variables in order to improve the inefficient banks. The findings show that domestic banks were generally more efficient than foreign banks. The results for the whole process show that domestic banks also performed better than foreign banks in both stages. The two-stage model used in this analysis enables inefficient banks to look at where the problem occurs, either in stage 1 or stage 2, thus allowing them to determine the suggested values in that inefficient stage that can bring them towards becoming fully efficient banks.

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A comparative analysis of rural banks’ efficiency between Bali and West Java provinces in Indonesia

Cited by 9 publications

References 15 publications

The Efficiency of BPR/S Industry in Sumatra, Indonesia

The Efficiency of BPR/S Industry in Sumatra, Indonesia

Efficiency Comparison between Conventional and Islamic Rural Banks in Sumatra during the COVID-19 Pandemic

Commercial Banks’ Performance In Malaysia Based On Non-Performing Loan (NPL) Using Two-Stage Data Envelopment Analysis (DEA) Model

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