The Impact of Non-Performing Loans on Credit Growth of Commercial Banks in Indonesia
Abstract
This study aims to examine the impact of bank-specific internal factors, namely non-performing loans, equity to total assets, operating expenses to total assets, liquid assets to total assets, and sensitivity to market risk on the credit growth of commercial banks in Indonesia listed on the Indonesia Stock Exchange (IDX) during the 2021-2025 period. The sample consists of 41 banks with a total of 205 annual observations. The analysis technique used is panel data regression with the Random Effect Model method utilizing Eviews 10 software. The results show that the equity capital ratio has a significant positive influence on credit growth, conversely, the non-performing loan ratio has a significant negative influence on credit growth, while the operating expenses ratio, liquidity adequacy ratio, and sensitivity to market risk do not show a significant impact on banking credit growth. These outcomes provide a crucial impact for bank management to optimize internal capital structures and tighten asset portfolio quality control to mitigate credit risk and achieve sustainable financial intermediation performance.
Downloads
Copyright (c) 2026 Muhammad Ghifari Andrian, Maria C. Widiastuti
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
An author who publishes in the Jurnal Fokus Manajemen (JFM) agrees to the following terms:
Author retains the copyright and grants the journal the right of first publication of the work simultaneously licensed under the Creative Commons Attribution-ShareAlike 4.0 License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal
Submission of a manuscript implies that the submitted work has not been published before (except as part of a thesis or report, or abstract); that it is not under consideration for publication elsewhere; that its publication has been approved by all co-authors. If and when the manuscript is accepted for publication, the author(s) still hold the copyright and retain publishing rights without restrictions. For the new invention, authors are suggested to manage its patent before published. The license type is CC-BY-SA 4.0.
Jurnal Fokus Manajemen (JFM) is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
You are free to:
Share — copy and redistribute the material in any medium or format
Adapt — remix, transform, and build upon the material
for any purpose, even commercially.
The licensor cannot revoke these freedoms as long as you follow the license terms.
