BANK OWNERSHIP, LOAN ALLOCATION AND BANK LOAN INTEREST IN INDONESIA

Amount: BANK OWNERSHIP, LOAN ALLOCATION AND BANK LOAN INTEREST IN INDONESIA

Author: OCTAVIA RENIAR PRINCESS

Item Type: Thesis

Memberships: Master of Management Science Study Program, Faculty of Economics and Business, Airlangga University, Surabaya, Indonesia

Publisher: Airlangga University

Abstract

The presence of foreign investors in banking can bring benefits to debtors, namely an increased supply of credit, especially foreign currency loans, but they tend to provide credit only to transparent debtors, and ignore debtors such as MSMEs, even though they have an important role for the national economy and require convenience. in access to credit. They often get it from banks with government ownership, while the contribution of banks with foreign ownership in this case still needs to be increased. Credit interest rates can also decrease due to increased competition from foreign investors. This study aims to determine the effect of type of bank ownership on MSME credit allocation, foreign currency credit allocation, and bank loan interest rates. This study uses a sample of conventional commercial banks in Indonesia during 2009-2017. The results of panel data regression using the random effects technique show that banks with government ownership have higher MSME credit allocations, lower foreign currency credit allocations, and higher loan interest rates than banks with non-government ownership. Banks with foreign ownership have lower MSME loan allocations, higher foreign currency loan allocations, and lower loan interest rates than banks with non-foreign ownership. Banks with foreign ownership through takeover have higher MSME loan allocations, lower foreign currency credit allocations, and higher loan interest rates than banks with foreign ownership through non-takeovers.

Keywords : bank ownership, credit allocation, MSMEs, foreign exchange, loan interest rates

sources: http://repository.unair.ac.id/87802/