Research Article
The Analysis of Financial Sustainability Ratio on Rural Banks in Indonesia
@INPROCEEDINGS{10.4108/eai.3-8-2021.2315153, author={Indra Saputra and Sekar Mayangsari}, title={The Analysis of Financial Sustainability Ratio on Rural Banks in Indonesia}, proceedings={Proceedings of the First Lekantara Annual Conference on Public Administration, Literature, Social Sciences, Humanities, and Education, LePALISSHE 2021, August 3, 2021, Malang, Indonesia}, publisher={EAI}, proceedings_a={LEPALISSHE}, year={2022}, month={1}, keywords={return on asset (roa); non-performing loan (npl); mobilization deposit (md); financial sustainability ratio (fsr)}, doi={10.4108/eai.3-8-2021.2315153} }- Indra Saputra
Sekar Mayangsari
Year: 2022
The Analysis of Financial Sustainability Ratio on Rural Banks in Indonesia
LEPALISSHE
EAI
DOI: 10.4108/eai.3-8-2021.2315153
Abstract
The purpose of this study is to examine and analyze the financial performance ratios consisting of return on assets, non-performing loans, mobilization deposits on financial sustainability ratio in rural bank institutions in Indonesia. Target population of this study was the rural bank Registered and supervised by the Financial Services Authority (OJK) in 2018-2020. With the sampling method selected based on the purposive sampling criteria, totaling 71 companies with 213 observations. Whereas non-performing loan describes the company's ability to manage its financing and the results illustrate that if there is an increase in non-performing loans it will happen a decrease in the condition of the company's financial sustainability. Variable mobilization deposit no has an influence on the company's financial sustainability, this illustrates that the greater the amount of funds that can be collected by the bank if it cannot be channeled through the provision of credit to customers it will not have an impact on sustainability because it is considered that these funds do not contribute to financial performance such as for the development and return of operating results and vice versa there are indications that can affect the decline in the company's financial sustainability condition due to prove to have a negative relationship. Furthermore, the size of the company cannot determine the company's financial sustainability.