What Factors Influence The Performance of Rural Banks? A Case Study in Indonesia

Abstract

Rural bank performance has been in the spotlight due to the challenges faced such as asset quality, operational efficiency, and increasingly tight competition from other financial institutions. This study aims to identify the factors that influence the performance of rural banks. The research was conducted using a of rural banks in Indonesia, with observations spanning from 2020 to 2023. The research data was obtained from secondary sources and processed using Stata version 17 for analysis. The results of the study indicate that before the interaction moderation, BOPO and CAR were significant to ROA, while NPL and LDR were not significant to ROA. After the interaction moderation, BOPO and LDR are significant to ROA, while CAR and NPL are not significant to ROA.

Keywords: Rural bank; performance; factors; financial ratios