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Macro economics factors and bank lending behaviour in Indonesia

Author

Listed:
  • Rofikoh Rokhim
  • Yinylia Rusli

    (Management Research Center, Department of Management, Faculty of Economics, Universitas Indonesia
    Under Graduate School, Department of Management, Faculty of Economics, Universitas Indonesia)

Abstract

This study examines the influencing macro economics factor in lending distribution and observes the comparison of each factor based on lending type which are investment, working capital and domestic consumption lending. Using data of Indonesian commercial banks between 2003-2011 and a balanced panel method, it finds that bank liquidity and inflation rate have significant negative effect, while number of banks has strong positive influence to stimulate lending distribution. Moreover, saving rate and GDP growth were found not meaningfully contributed to change investment lending distribution, but they significantly influenced the other lending distribution. Lastly, reserve requirement and exchange rate did not significantly influence all lending type.

Suggested Citation

  • Rofikoh Rokhim & Yinylia Rusli, 2012. "Macro economics factors and bank lending behaviour in Indonesia," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 4(2), pages 153-162, April.
    • Handle: RePEc:uii:journl:v:4:y:2012:i:2:p:153-162
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Loan; interest rate; growth; GDP.;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers

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