Determinants of Financial Distress Rural Bank in Indonesia: A Logit Approach

Authors

  • Verinisa Indrajati, Yessy Yuvita, Nabilla A. Putri, Fani O. Rismawati, Devy M. Puspitasari

Abstract

This study aims to investigate determinants of financial distress rural banks in Indonesia using logit approach. The method used in this study uses logit. The data used are secondary data obtained from Bank publication reports during period 2014 - 2018. The population used in this study is rural banks in Indonesia and sample selection based on purposive sampling evidence East Java. The results showed that capital, profitability and productivity have significant influence to financial distress bank. Rural banks should maintain adequate capital, increase profits and maintain credit growth in order to avoid financial distress. This study is useful to determine the determinants of rural bank financial distress in Indonesia by using the logit approach, adopting the Altman variable and adding the credit risk variable.

 

Published

2020-12-10

Issue

Section

Articles