Analysis of Credit Risk, Efficiency, Liquidity, and Profitability of Selected Non-Bank Financial Institution: An Empirical Study

Abstract

Financial Institutes are the lifeblood of the financial system of any country that plays an intermediary between the surplus and deficit unit of any society. So the efficiency and performance of a financial institution is the indication of sound financial system. In this study the authors are trying to analyze the factors such as credit risk, efficiency, liquidity, and profitability; which affect the performance of non-bank financial institutions. The methods used are descriptive with secondary data from financial statements of Non-Bank Financial Institutions from 2010 to 2015. Linear regressions, ANOVA, hypothesis testing while using F-test to examine the effect of variables simultaneously with a significance level of 5 %. Based on the results it is concluded that partial NPM and ROA have positive and significant effects on LDR. NPL has a negative effect of loan to deposit ratio. The amount of the contribution or influence variable of NIM, OPM, NPM, ROA, ROE and NPL to the dependent variable of LDR is 87.45% while the remaining 12.55% thought to be influenced by other variables not examined in this study.