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Jurnal Ekonomi Malaysia

54 (3) 2020 77 – 87

The Role of Infrastructure Loan in the Regional Development Bank
Peranan Pinjaman Infrastruktur di Bank Pembangunan Kawasan

Faculty of Economics and Business
Sam Ratulangi University
Jl. Kampus Unsrat, Manado 95115
INDONESIA

karamoy_herman@yahoo.com

Faculty of Economics and Business
Sam Ratulangi University
Jl. Kampus Unsrat, Manado 95115
INDONESIA

hizkiatasik1@gmail.com

Abstract

This paper aims to examine the role of infrastructure loan in Indonesian regional development banks. This research further analyze the relationship between types of loan and NPL. The paper employs the approaches of simulation and panel data regression on a sample of 24 Indonesian regional development banks over 2009 to 2016. It examines the financial performance of bank that have not offering infrastructure loan. It further simulates the financial performance of the bank when infrastructure loan is offered, and compares it to the initial financial performance. The results found that the banks perform better when they provide infrastructure loan than without such loan. However, the better performance of the banks in profitability and cost management is a result of the trade-off with lower liquidity. Our finding based on panel data regression indicates that Working Capital Loan and Consumptive Loan are the main contributors to the NPL. However, there is an indication that the increased in long term loan that includes infrastructure loan able to reduce the NPL.

Keywords

financial indicators simulation; infrastructure loan; Regional Development bank

Author’s Acknowledgement

We would like to thank Ministry of Higher Education of Republic of Indonesia for the research grant under DRPM Ristek Dikti program. We also would like to
thank Mac Rumangu for an excellent assistance.

http://dx.doi.org/10.17576/JEM-2020-5403-6
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Karamoy, , & Tasik, (2020). The Role of Infrastructure Loan in the Regional Development Bank. Jurnal Ekonomi Malaysia, 54(3), 77–87. http://dx.doi.org/10.17576/JEM-2020-5403-6

@article{karamoy2020role,
  title={The Role of Infrastructure Loan in the Regional Development Bank},
  author={Karamoy, Herman and Tasik, Hizkia H. D.},
  journal={Jurnal Ekonomi Malaysia},
  volume={54},
  number={3},
  pages={77—87},
 

year={2020},
}

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