Proceedings of the 1st International Conference on Statistics and Analytics, ICSA 2019, 2-3 August 2019, Bogor, Indonesia

Research Article

Determining Factors That Affecting Financial Performance of Sharia Small Business Bank by Using Ordinal Logistic Regression with Bootstrap Estimation

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  • @INPROCEEDINGS{10.4108/eai.2-8-2019.2290529,
        author={Muhammad  Ridho and Dodi  Devianto},
        title={Determining Factors That Affecting Financial Performance of Sharia Small Business Bank by Using Ordinal Logistic Regression with Bootstrap Estimation},
        proceedings={Proceedings of the 1st International Conference on Statistics and Analytics, ICSA 2019, 2-3 August 2019, Bogor, Indonesia},
        publisher={EAI},
        proceedings_a={ICSA},
        year={2020},
        month={1},
        keywords={bootstrap estimation financial performance ordinal logistic regression sharia small business bank},
        doi={10.4108/eai.2-8-2019.2290529}
    }
    
  • Muhammad Ridho
    Dodi Devianto
    Year: 2020
    Determining Factors That Affecting Financial Performance of Sharia Small Business Bank by Using Ordinal Logistic Regression with Bootstrap Estimation
    ICSA
    EAI
    DOI: 10.4108/eai.2-8-2019.2290529
Muhammad Ridho1,*, Dodi Devianto1
  • 1: Department of Mathematics, Andalas University, Padang, 25163, Indonesia
*Contact email: dho22.mhd@gmail.com

Abstract

The aim of this study is to find out the financial performance‘s affecting factors of sharia small business bank in Indonesia. Financial performance is the response variable which grouped into three categories, they are bad, medium, and good. Predictor variables involved in this study consisted of 11 numerical data and 1 categorical data. The numerical data are financial capital, productive assets, credit, third party funds, income, capital adequacy ratio, return on assets, return on equity, financing deposit ratio, non performing financing, and operational efficiency. Whereas the categorical data is the location of sharia small business bank (1 if it is in rural areas, 2 if it is in the business center, and 3 if it is in a business and urban center). Ordinal logistic regression with a bootstrap estimation is performed to determine the predictor variable that affects the response variable. This study found that two predictor variables affected the response variable significantly, namely return on assets and return on equity with a hit ratio of 96.41%. So that it can be concluded that the model obtained has been able to determine the level of performance of sharia small business bank in Indonesia.