IMPLEMENTATION OF OHLSON'S MODEL AS AN EARLY WARNING SYSTEM IN PREDICTING FINANCIAL DISTRESS OF WORKING CAPITAL CREDIT CUSTOMERS AT BRI

Title: IMPLEMENTATION OF OHLSON'S MODEL AS AN EARLY WARNING SYSTEM IN PREDICTING FINANCIAL DISTRESS OF WORKING CAPITAL CREDIT CUSTOMERS AT BRI

Author: FIDA OCTAFIANI

Item Type : Thesis (Thesis)

Affiliations: Master of Management Study Program, Faculty of Economics and Business, Universitas Airlangga , Surabaya, Indonesia

Publisher: Universitas Airlangga

Abstract

One of the valuable assets of a bank is competent debtors, namely borrowers of funds who have the capability to return the funds in accordance with the specified amount and on time. BRI Surabaya Pahlawan Branch Office, which provides credit facility services, is very vulnerable to potential credit problems. Therefore, symptoms of bankruptcy must be detected early. Ohlson's model is a complementary alternative to the established credit risk rating. This research has two objectives, namely to find out whether Ohlson's model is able to predict the potential bankruptcy of existing working capital credit customers at the BRI Pahlawan branch and to find out and analyze what variables can predict the potential for bankruptcy in the credit extension process at the BRI Pahlawan branch. The sample used was working capital credit customers of BRI Pahlawan branch taken using a purposive sampling technique in the 2008-2010 period. There are 9 variables used, namely SIZE, TLTA, WCTA, CLCA, OENEG, NITA. FUTL and INTWO. Data processing in this research uses logistic regression analysis. The results of the research are that Ohlson's model is able to predict the potential bankruptcy of existing working capital credit customers with an accuracy level of 90% in model 1, 76.7% in model 2 and 71.7% in model 3. The significant variable in each model is SIZE.

Keywords: credit, financial distress, Ohlson's model, logistic regression.

Sources: http://repository.unair.ac.id/37179/