Abstract: Banks can be said to be like the heart of a country, especially for developing countries. One of the bank activities is channeling funds in the form of credit. An increase in the amount of credit will also be followed by the possibility of credit uncollectibility and entanglement in non-performing loans. To measure a bank's ability to overcome credit default by debtors, the Non-Performing Loan (NPL) ratio can be used. The purpose of this study is to obtain empirical evidence of the effect of credit interest rates, LDR and CAR on NPLs. This research uses signal theory. This research was conducted at banking companies listed on the Indonesia Stock Exchange (IDX) using the non-participant observation method. The population of this research is 45 banks. The sample selection method used nonprobability sampling method with purposive sampling technique, the sample was obtained as many as 34 banks in 4 years of observation. The data analysis technique used is multiple linear regression analysis techniques. The results show that credit interest rates have no effect on NPL. This means that the increase or decrease in the credit interest rate charged by the bank does not affect the NPL ratio. LDR has no effect on NPL. This means that high or low total loans disbursed compared to total third party funds held by banks do not affect the NPL ratio. CAR has a negative effect on the NPL. This means that the higher the CAR ratio of the bank, the lower the NPL ratio.
Keyword: Credit interest rates, LDR, CAR and NPL.
Title: The Effect of Credit Interest Rates, Loan to Deposit Ratio and Capital Adequacy Ratio on Non-Performing Loan in Commercial Banks Registered on IDX 2016-2019 Period
Author: Ida Ayu Made Sinta Widiari, I Dewa Gede Dharma Suputra
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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