THE EFFECT OF FINANCIAL RATIO TOWARD MSME CREDIT DISTRIBUTION OF COMMERCIAL BANKS IN INDONESIA

Abstract

This research objective is to determine the factors that effect the MSME credit distribution of Indonesia Commercial banks period 2011-2016. This research has applied purposive sampling method and panel data where the data was collected from the official websites of every bank and Bank Indonesia. This study had 120 observations from five banks in six years quarterly. This research use quantitative research with fixed model. An empirical evidence of this research indicates that ROA and NPL has a negative effect and CAR has positive and significant effect to MSME credit distribution. Meanwhile, LDR has insignificant effect to MSME credit distribution. Simultaneously, all of the independent variables have the significant effect to MSME credit distribution which describe by the value of 92.8% and the remaining 7.2% is explained by another factor that exclude in this research.