scholarly journals High Lending Rates in Indonesia: Inflation Rates and Bank Inefficiencies

2020 ◽  
pp. 95-100
Author(s):  
Ari Christianti
Keyword(s):  
Interest Rates ◽  
Inflation Rate ◽  
Positive Impact ◽  
Panel Data Analysis ◽  
Consumer Credit ◽  
Commercial Banking ◽  
Working Capital ◽  
Operating Income ◽  
Lending Rates ◽  
Loan Interest Rates

Inefficient banking systems will affect the Indonesian economy resulting in a high lending rate structure which impacts the cost of capital in real sectors. This study aims to determine if the high lending rates in Indonesia are caused by the high inflation rate and bank inefficiencies. Using monthly panel data analysis from four categories of commercial banking in Indonesia for the period January 2009-December 2017, the results of the study show that operating expenses operating income (OEOI) and net interest margin (NIM) factors, as a measure of efficiency, have a positive impact on loan interest rates for working capital loans, investment loans and consumer loans. Furthermore, inflation rate has a positive effect on loan interest rates for working capital and investment loans only. However, this contrasts with consumer credit where the inflation rate has a negative effect on consumer credit rates. This might be attributed to the fact that interest rates for consumer credit consider default risk factors and high demand rather than inflation factors.

Working Capital Management und dessen Rolle als Instrument zur Rentabilitäts- und Unternehmenswertsteuerung: Eine empirische Untersuchung über deutsche Blue Chips

2021 ◽  
Vol 75 (4) ◽  
pp. 576-592
Author(s):  
Michel Charifzadeh ◽  
Tim A. Herberger ◽  
Bernadette Högerle ◽  
Marlene Ferencz
Keyword(s):  
Interest Rates ◽  
Positive Impact ◽  
Management Tool ◽  
Capital Management ◽  
Working Capital ◽  
Working Capital Management ◽  
Enterprise Value ◽  
Low Interest Rates ◽  
German Stock ◽  
Stock Indexes

Despite the phase of low interest rates, working capital management remains a key value driver in companies and an important management tool. Our results for 115 companies listed on the most important German stock indexes for the years 2011 to 2017 show that effective working capital management can have a positive impact on profitability and enterprise value. At the same time, our results also show that less attention has recently been paid to working capital management and that digital innovations are probably not yet being used to the extent that seems possible to increase efficiency. Even against the background of continuously low capital market interest rates, this must be viewed critically.

scholarly journals Legal construction of interest rate determination in information technology-based lending services in Indonesia

2021 ◽  
Vol 5 (S4) ◽  
Author(s):  
Engrina Fauzi ◽  
Busyra Azheri ◽  
M. Hasbi ◽  
Nani Mulyati
Keyword(s):  
Information Technology ◽  
Interest Rate ◽  
Interest Rates ◽  
Inflation Targeting ◽  
Inflation Rate ◽  
Code Of Conduct ◽  
Not Given ◽  
Loan Interest Rates ◽  
The Interest Rate

There is a legal vacuum regarding determining loan interest rates in Article 17 paragraph (1) POJK No. 77/01/2016 concerning Information Technology-Based Lending and Borrowing Services (ITBLBS). With this legal vacuum, O.J.K. has given the authority to AFPI to self-regulate the determination of loan interest rates at ITBLBS. With authority as an S.R.O. ( Self Regulating Organization ) institution owned by the Indonesian Joint Funding Fintech Association (IJFFA). The method used is normative legal research by analyzing primary, secondary, and tertiary legal materials related to the research title. The interest rate in the code of conduct that IFFFA determines as the principle of operation in ITBLBS directly affects the inflation rate. However, Bank Indonesia, as the institution authorized and responsible for targeting inflation in terms of controlling interest rates circulating in the fintech market, is not given any authority based on Article 17 POJK N0. 77 of 2016. This is in contrast to the inflation targeting objective, which is the authority of B.I. It can be concluded that the determination of interest rates in the existing ITBLBS is normatively out of sync between the objectives of the legislation and the objectives of the IJFFA code of conduct.

scholarly journals Analisis Faktor-Faktor yang Mempengaruhi Permohonan Kredit Modal Kerja Usaha Kecil dan Menengah (Studi Kasus Pada PT. Bank X Capem Y Kota Banda Aceh)

2016 ◽  
Vol 1 (1) ◽  
pp. 571-585
Author(s):  
Rizka Oky Pryanka ◽  
Widyawati Widyawati ◽  
Safrida Safrida
Keyword(s):  
Interest Rate ◽  
Linear Regression ◽  
Interest Rates ◽  
Financial Institutions ◽  
Linear Regression Model ◽  
Multiple Linear Regression Model ◽  
Working Capital ◽  
Negative Effect ◽  
Loan Interest Rates ◽  
Banda Aceh

Abstrak - Kredit merupakan salah satu bagian pembentukan modal yang dilakukan oleh lembaga keuangan. PT. Bank X Kota Banda Aceh telah merealisasikan permohonan Kredit Modal Kerja kepada pengusaha Usaha Kecil dan menengah. Penelitian ini bertujuan untuk mengetahui faktor-faktor suku bunga, pendapatan dan agunan dalam mempengaruhi permohonan kredit Modal Kerja Usaha Kecil dan Menengah pada PT. Bank X. Metode yang digunakan dalam penelitian ini adalah metode studi kasus. Pemilihan sampel sebanyak 20 orang dan diambil keseluruhan dari jumlah populasi dengan menggunakan teknik purposive sampling. Metode pengolahan dan analisis data menggunakan model regresi linear berganda. Hasil penelitian menunjukkan bahwa variabel  suku bunga (X1) berpengaruh negatif dan signifikan terhadap permohonan kredit modal kerja. Variabel pendapatan (X2) tidak berpengaruh secara signifikan terhadap permohonan kredit modal kerja. Sedangkan variabel agunan (X3) berpengaruh positif dan signifikan terhadap permohonan kredit modal kerja.Kata Kunci : Kredit, Kredit Modal Kerja, Suku Bunga, Pendapatan, dan AgunanAbstract - Credit is one of capital formation carried out by financial institutions. PT. Bank X Banda Aceh has provided working capital loan to small and medium entrepreneurs (SMEs). This study aims to determine the influence of interest rates, income and collateral in affecting working capital loan application in PT. Bank X. 20 customers of PT. Bank X who received working capital loan were purposefully selected (purposive technique sampling). Data were analyzed using multiple linear regression model. The result showed that interest rate (X1) has a significant negative effect on the working capital credit application. Variabel income (X2) do not significantly affect the working capital credit application. While the variabel collateral (X3) has positive and significant impact on working capital credit application.Keywords : Loans, Working Capital Loan, Interest Rates, Revenue, and Collateral.

Some Problems on Commercial Banking in China

1998 ◽  
Vol 01 (02) ◽  
pp. 181-199
Author(s):  
Frank C. Jen
Keyword(s):  
Interest Rates ◽  
Commercial Banks ◽  
Inflation Rate ◽  
Commercial Banking ◽  
Bankruptcy Risk ◽  
Inflation Risk ◽  
Public Markets ◽  
Bank Deposits ◽  
Public Market ◽  
High Inflation

In this paper, I discussed two problems faced by commercial banks in China in the early to mid 90's when inflation rate was high. The first problem is the use of interest rates indexed to inflation to stop disintermediation of bank deposits during the high inflation period. I observed that commercial banks cannot easily recover the additional cost of funds due to inflation from their borrower. Nor can the banks hedge the inflation risk in a public market. Banks accepting inflation-indexed deposits will then be exposing themselves to high bankruptcy risk. A proposal of offering deposit products that are denominated in RMB but indexed to gold or US$ prices is recommended as replacements for inflation-indexed deposits because for both deposit products, banks can hedge the fluctuations in interest rates through international public markets. The second problem is how banks can serve as effective monitors of economic performances of the State-Owned-Enterprises (SOEs) by allocating more credit to more efficient SOEs and by refusing credit to very weak ones. I review the problems currently faced by managers in the SOEs and in the commercial banks. I then recommend managers in commercial banks to be trained as effective loan managers capable of helping SOE managers build good businesses. Further, they have to conduct their own businesses in a very professional manner.

Strategi Pengelolaan Risiko dan Peningkatan Kualitas Pengelolaan Kas Negara

2017 ◽  
Vol 2 (2) ◽  
pp. 43-54
Author(s):  
Agung Mulyono
Keyword(s):  
Interest Rates ◽  
Financial Risk ◽  
Vector Autoregression ◽  
Secondary Market ◽  
Key Factors ◽  
Bond Price ◽  
Hedging Strategy ◽  
Foreign Loan ◽  
Term Operation ◽  
Loan Interest Rates

Cash management is  one of treasury’s main functions in which has a potential financial risk. A potential financial risk emerges when State Treasurer manages cash surplus and or/ shortages in order to maintain optimum liquidity. By applying Vector Autoregression (VAR) system on empirical data provided by Bank Indonesia and the Ministry of Finance of Indonesia, we found that currency value  flunctuation is a significant factor for repayment value of foreign loan. Interest rates and amount of government’s bond held by foreign investors are also variables impacted on government’s bond price movement in secondary market. Currency value  flunctuation and price of government’s bond in secondary market are the key factors that have to be considered by State Treasurer (BUN) in managing state’s money. Hedging strategy by using derivatif product is possible to be utilized by State Treasurer (BUN) due to it’s flexibility for short-term operation.   Abstrak Pengelolaan kas negara merupakan salah satu fungsi pokok perbendaharaan yang dalam proses pelaksanaannya menyimpan potensi berbagai risiko keuangan. Risiko keuangan, khususnya dalam investasi berpotensi muncul ketika Bendahara Umum Negara (BUN) melakukan kegiatan pengelolaan kelebihan dan/ kekurangan kas dalam rangka menjamin ketersediaan dan optimalisasi kas. Dengan menggunakan analisis Vector Autoregression (VAR) atas data empiris yang diperoleh dari Bank Indonesia dan Kementerian Keuangan Indonesia, penulis menemukan bahwa fluktuasi nilai tukar mata uang merupakan faktor yang signifikan terhadap besaran pembayaran utang luar negeri pemerintah. Tingkat suku bunga acuan dan pergerakan besaran kepemilikan SUN oleh investor asing juga merupakan variabel yang berpengaruh terhadap pergerakan harga SUN di pasar sekunder. Fluktuasi nilai tukar mata uang dan pergerakan harga SUN di pasar sekunder menjadi faktor penting dalam pelaksanaan investasi yang dilakukan BUN dalam rangka pengelolaan kelebihan dan/ kekurangan kas. Berdasarkan hasil tersebut, strategi pengelolaan risiko atau hedging dengan menggunakan produk-produk derivatif dalam pengelolaan kelebihan dan/ kekurangan kas jangka pendek – menengah sangat dimungkinkan karena sifat instrumen derivatif yang fleksibel.

DETERMINAN INFLASI DI INDONESIA PERIODE 1980-2015

2016 ◽  
Vol 21 (1) ◽  
pp. 1-7
Author(s):  
Risna Risna
Keyword(s):  
Interest Rate ◽  
Interest Rates ◽  
Money Supply ◽  
Government Spending ◽  
Positive Impact ◽  
Secondary Data ◽  
Quantitative Approach ◽  
State Spending ◽  
Factors Affecting ◽  
The Interest Rate

This study aims to determine the effect of government spending, the money supply, the interest rate of Bank Indonesia against inflation.This study uses secondary data. Secondary data were obtained directly from the Central Bureau of Statistics and Bank Indonesia. It can be said that there are factors affecting inflationas government spending, money supply, and interest rates BI. The reseach uses a quantitative approach to methods of e-views in the data. The results of analysis of three variables show that state spending significantand positive impact on inflationin Indonesia, the money supply significantand negative to inflationin Indonesia, BI rate a significantand positive impact on inflation in Indonesia

Lack of Credit in Albania; Who is to “Blame” Analyzing the Demand

2015 ◽  
Vol 3 (1) ◽  
pp. 122
Author(s):  
Eugen Musta ◽  
Elvin Meka
Keyword(s):  
Interest Rates ◽  
Small Sample ◽  
Economic Situation ◽  
Demand Side ◽  
Working Capital ◽  
Global Crisis ◽  
High Interest ◽  
Future Perceptions ◽  
Economic Slowdown ◽  
To Come

The last global crisis had it influence on Albanian economy as well. As the economy is still struggling to recover from the slowdown, a special attention is dedicated to lending which will in turn help investments pick up. Banks in Albania are currently flooding in excess deposits, but meanwhile the lending has hit its lowest score. What is refraining banks from lending? Is it really them to blame or maybe the demand is also part of the problem? Are businesses suffering from lack of funds to finance their activity or are they hesitating to invest and are waiting for better times to come along? The purpose of this study is to look into these questions and find the reasons behind them. This paper is focused on the demand side, analyzing some of the most important indicators influencing the demand for credit like enterprises growth, profits, planned investments, working capital needs, liquidity, etc. In order to get better understanding on the behavior of these variables the enterprises are divided in four groups by size criteria. The analysis is covering data for five-year timeframe, which is corresponding with the start of the economic slowdown. To help getting a prospect of the present and the future perceptions of the economic situation, a survey was conducted on a small sample of enterprises. This study comes to the conclusion that the demand for credit is growing, but what’s keeping businesses from applying for it, is mainly because of high interest rates and cost of credit, the study ends with some recommendations toward the solution.

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