Factors Affecting the Financial Performance of Credit Union in Indonesia

Abstract

The research aims to find out a number of things in terms of macro and micro data that affect the condition of the financial performance of Credit union in all provinces in Indonesia both in terms of internal factors and external factors both in terms of microeconomics and macroeconomics. Therefore, the assessment of the financial performance of Credit union throughout Indonesia has an important role to play in terms of profitability ratios which are influenced by a number of variables. Empirical evidence in this study shows that the total assets, the age of the cooperative and the number of members have a positive and significant relationship to the profitability ratio of return on assets of credit union in Indonesia. In addition, Number of Branches, Merger Activities have a negative influence and a significant relationship to the financial performance of credit union. Meanwhile, macroeconomic variables such as provincial GRDP do not have a significant relationship and influence on the activity performance of the return on asset profitability ratio of credit union. This finding has an important role in improving services to credit cooperative members who are SMEs so that they can increase their contribution to the percentage of economic growth.

Gestión Financiera de las Cooperativas de Crédito y el Sistema Bancario Privado de Ecuador durante el período 2015 – 2020

“…En investigaciones previas (Almehdawe et al, 2021;Da Silva et al, 2017;Esokomi & Mutua, 2018;Parliament et al, 1990;Porter & Scully, 1987;Simamora et al, 2023;Tirfe, 2014) han utilizado varias ratios para determinar el rendimiento de distintas cooperativas de crédito. Entre ellos se encuentran el rendimiento económico (Return on Asset -ROA) y el rendimiento financiero (Return on equity -ROE).…”

“…Los factores internos incluyen el tamaño, la diversificación de los ingresos, la antigüedad, las fusiones previas, las ratios de adecuación del capital, la penetración y la competencia en el mercado (Kuc & Teplý, 2018;Pereira Lima et al, 2021). Los factores externos asociados a la ubicación geográfica y a las condiciones ambientales en las que la cooperativa de crédito desarrolla sus actividades inciden en su capacidad para potenciar su desempeño financiero (Almehdawe et al, 2021;Simamora et al, 2023). Asimismo, se incluyen dentro de este grupo de factores variables macroeconómicas a nivel nacional y regional, como la tasa de inflación, el crecimiento de la economía, el producto interior bruto y el riesgo país, entre otros.…”

The influence of leadership and financial performance on business sustainability in microfinance institutions

“…Financial performance, as a quintessential metric, mirrors a business's capability to generate profits (Simamora et al, 2023), and within the MFI landscape, it stands as a critical determinant of sustainability. A robust financial performance goes beyond mere fiscal metrics; it entails building and fortifying customer trust, acting as a catalyst for business growth, and ensuring the accrual of adequate profits for the MFI.…”