DETERMINAN PERTUMBUHAN KREDIT MODAL KERJA PERBANKAN DI INDONESIA: Pendekatan Error Correction Model (ECM)

Abstract

Bank loans has an important role in financing the national economy and driving force of economic growth. Therefore, credit growth must be balanced. However, the condition show that commercial bank credit growth slowed back.Using the method of Error Correction Model (ECM) Domowitz-El Badawi, the study analyze the impact of short-term and long-term independent variables to determine the credit growth in Indonesia financial sector. The results show that, in the short term only non performing loans are significant negative effect on the working capital loans growth. For long-term, working capital loan interest rates have a significant negative effect, third party funds growth have a significant positive effect and inflation have a significant negative effect.