Analysis of Determinants of Working Capital Credit Growth at Bank Persero in Indonesia

Abstract

The purpose of this study is to analyze the effect of Third Party Funds (DPK), Non-Performing Loans (NPL), inflation, and BI Rate on the growth of working capital loans at Bank Persero in Indonesia. The analysis was conducted on four Persero Banks in Indonesia, namely Bank Rakyat Indonesia, Bank Mandiri, Bank Negara Indonesia, and Bank Tabungan Negara during the period January 2014 to December 2020. The analysis technique used is time-series data regression with the Error Correction Model (ECM) approach. The results showed that partially, deposits had a significant positive effect, while NPLs had a significant negative effect on the growth of working capital loans at Bank Persero, both in the long and short term. In addition, the inflation rate does not have a significant effect on the growth of working capital loans at Bank Persero, both in the long and short term. The BI Rate does not have a significant effect in the long term, but has a significant positive effect in the short term on the growth of working capital loans at Bank Persero. Simultaneously, deposits, NPLs, inflation, and the BI Rate have a significant influence on the growth of working capital loans at Bank Persero in Indonesia.