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Determinants of credit market in Indonesian banking industry

This study aims to find out determinants of conventional banks’ credit supply and demand in Indonesia between 2005 and 2014, a period after recovery from financial crisis in 1997/1998. Some literatures suggest that demand and supply of credit are determined by the rates of credit and bonds. This stu...

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Main Authors: Siti Aisyah Tri Rahayu,, Tri Mulyaningsih,, Cahyadin, Malik
Format: Article
Language:English
Published: Penerbit Universiti Kebangsaan Malaysia 2019
Online Access:http://journalarticle.ukm.my/14135/1/jeko_53%283%29-2.pdf
http://journalarticle.ukm.my/14135/
http://www.ukm.my/fep/jem/content/2019-3.html
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spelling my-ukm.journal.141352020-02-07T10:48:05Z http://journalarticle.ukm.my/14135/ Determinants of credit market in Indonesian banking industry Siti Aisyah Tri Rahayu, Tri Mulyaningsih, Cahyadin, Malik This study aims to find out determinants of conventional banks’ credit supply and demand in Indonesia between 2005 and 2014, a period after recovery from financial crisis in 1997/1998. Some literatures suggest that demand and supply of credit are determined by the rates of credit and bonds. This study is expected to contribute to the literature by considering the role of prudential policy, market structure and banks ownership on supply and demand for credits. By using the bank level yearly data, the Seemingly Unrelated Regression model is employed to manage simultaneity between demand and supply of credit. The empirical findings support the literature that in the case of Indonesian banking, demand and supply of credit are determined by the rates of lending and yields of bonds and the rates of Bank Indonesia Certificate (Sertifikat Bank Indonesia/SBI). This study also reveals that prudential regulation has even dampened the banks’ capability to supply lending. By implication, banks’ higher lending capacity could improve their supply of credits. Hence, larger banks are proved to be able to supply more credits than the smaller ones; whereas the demands for credit remain to be substantially determined by the macroeconomic conditions. Penerbit Universiti Kebangsaan Malaysia 2019 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/14135/1/jeko_53%283%29-2.pdf Siti Aisyah Tri Rahayu, and Tri Mulyaningsih, and Cahyadin, Malik (2019) Determinants of credit market in Indonesian banking industry. Jurnal Ekonomi Malaysia, 53 (3). pp. 1-11. ISSN 0127-1962 http://www.ukm.my/fep/jem/content/2019-3.html
institution Universiti Kebangsaan Malaysia
building Tun Sri Lanang Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Kebangsaan Malaysia
content_source UKM Journal Article Repository
url_provider http://journalarticle.ukm.my/
language English
description This study aims to find out determinants of conventional banks’ credit supply and demand in Indonesia between 2005 and 2014, a period after recovery from financial crisis in 1997/1998. Some literatures suggest that demand and supply of credit are determined by the rates of credit and bonds. This study is expected to contribute to the literature by considering the role of prudential policy, market structure and banks ownership on supply and demand for credits. By using the bank level yearly data, the Seemingly Unrelated Regression model is employed to manage simultaneity between demand and supply of credit. The empirical findings support the literature that in the case of Indonesian banking, demand and supply of credit are determined by the rates of lending and yields of bonds and the rates of Bank Indonesia Certificate (Sertifikat Bank Indonesia/SBI). This study also reveals that prudential regulation has even dampened the banks’ capability to supply lending. By implication, banks’ higher lending capacity could improve their supply of credits. Hence, larger banks are proved to be able to supply more credits than the smaller ones; whereas the demands for credit remain to be substantially determined by the macroeconomic conditions.
format Article
author Siti Aisyah Tri Rahayu,
Tri Mulyaningsih,
Cahyadin, Malik
spellingShingle Siti Aisyah Tri Rahayu,
Tri Mulyaningsih,
Cahyadin, Malik
Determinants of credit market in Indonesian banking industry
author_facet Siti Aisyah Tri Rahayu,
Tri Mulyaningsih,
Cahyadin, Malik
author_sort Siti Aisyah Tri Rahayu,
title Determinants of credit market in Indonesian banking industry
title_short Determinants of credit market in Indonesian banking industry
title_full Determinants of credit market in Indonesian banking industry
title_fullStr Determinants of credit market in Indonesian banking industry
title_full_unstemmed Determinants of credit market in Indonesian banking industry
title_sort determinants of credit market in indonesian banking industry
publisher Penerbit Universiti Kebangsaan Malaysia
publishDate 2019
url http://journalarticle.ukm.my/14135/1/jeko_53%283%29-2.pdf
http://journalarticle.ukm.my/14135/
http://www.ukm.my/fep/jem/content/2019-3.html
_version_ 1662755927105732608
score 13.211869

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