ISSN: 1204-5357

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Research Article Open Access

Model for Overcoming Decline in Credit Growth (Case Study of Indonesia With Time Series Data 2012m1-2016m12)


The problem in this study is the declining growth in bank lending in Indonesia recently. Related to this problem, this research aims to draw up a model to determine the variables that affect the growth of the bank credit declined. In general, for all models which is used in this study, almost all the variables such as Deposit Growth, lagged GDP Growth, Inflation and lagged BI (central bank) rate consistently significant influence on Credit Growth (2012M1 -2016M12), except Liability to Non-resident Growth is not significant but the sign of regression coefficient is consistent. The recommended model is quite good and can be reliable to recommend a policy to improve credit growth because it is consistent with previous research, logic, supported by a strong banking theory, R2 moderate, not serious autocorrelation problem (best linear unbiased estimator). Almost all variables when tested individually or simultaneously significant. Based on the consideration above, mentioned models can be used as a model for improving credit growth in Indonesia which lately decline.

Zainul Kisman

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