Publication Date: 2022/10/22
Abstract: Financial Services Authority (OJK) in Indonesia has overruled licenses to 59 rural banks for the 2016-2021 period, of which 33 or 55.9% are located in Java. This study aims to formulate a rural bank bankruptcy prediction model through financial indicators included in the RGEC Model. Quantitative analysis for processing data include descriptive statistics, independent t-test and logistic regression. The number of secondary data amounted to 66 (33 Bankrupt rural bank and 33 Healthy rural bank). The results showed that the variables of Non-Performing Loan (NPL), Return On Asset (ROA) and Return On Equity (ROE) had a significant effect on the probability of rural bank bankruptcy while the Allowance for Write-off of Productive Assets (PPAP), Net Interest Margin (NIM) and The Capital Adequacy Ratio (CAR) had no significant effect. Simultaneously, the entirety of independent variables affects the probability of bankruptcy of the rural bank.
Keywords: BPR, Bankruptcy, Logistic Regression.
DOI: https://doi.org/10.5281/zenodo.7238267
PDF: https://ijirst.demo4.arinfotech.co/assets/upload/files/IJISRT22OCT073.pdf
REFERENCES