Contribution OF Rural Banks TO The Indonesia,s Economy: A Preliminary Investigation

Sugiharto, Toto (2012) Contribution OF Rural Banks TO The Indonesia,s Economy: A Preliminary Investigation. II UZBEK-INDONESIAN JOINT INTERNATIONAL CONFERENCE.

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Abstract

Rural banks are associated with micro, small, and medium enterprises lending and local community development. In Indonesia, the number of these enterprises and their contribution to nation's economy are of significance. The present study aimed at investigating the role of banks, particularly rural banks, in the Indonesia's economy. Time series data on the provincial economic growth (i.e., gross regional domestic products) and the rural banks growth indicators (i.e., number of banks, number of offices, third party funds, and assets growth) were used in this study. The data which were obtained from various sources-Central Bank of Indonesia and Statistics Indonesia in particular-were analyzed. Results of correlation analysis show that all indicators of rural banks growth closely related with economic growth indicator. This indicates that rural banks have the potential to play an important contribution to the country ' s economic growth through its provincial economic development. Using multiple linear regression analysis to evaluate the potential influence of rural banks on regional economic growth, it is found that simultaneously regional economic growth is influenced by rural banks through their growth indicators. Partially, however, only one rural banks growth indicators that significantly influence economic growth namely number of rural banks. This preliminary study will further be followed by a more comprehensive study using regional (i.e., provincial) data with more appropriate statistical model.

Item Type: Article
Uncontrolled Keywords: rural banks; economic growth; gross domestic product
Subjects: A General Works > AI Indexes (General)
Divisions: Fakultas Ekonomi > Program Studi Manajemen
Depositing User: Mr Reza Chandra
Date Deposited: 28 Feb 2014 09:22
Last Modified: 28 Feb 2014 09:22
URI: http://repository.gunadarma.ac.id/id/eprint/1157

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