Efficiency of Islamic Rural Banks (BPRS) in East Java Province, Indonesia

Sadono, Endiarjati Dewandaru

doi:10.30993/tifbr.v11i1.103

Cited by 4 publications

(4 citation statements)

References 10 publications

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“…Seeing the condition of BPRS which is vulnerable compared to BPR, it is necessary to study more deeply and examine what factors cause this to happen. This has been done by Sadono, E. D. (2017) who measured technical efficiency and identified the factors that influence technical inefficiency at Islamic People's Financing Banks (BPRS) in East Java Province. NPF, in addition, the study explains that the technical efficiency of BPRS operations is 90.12 percent.…”

Section: Previous Studiesmentioning

confidence: 99%

Non-parametric Efficiency of Islamic Rural Banks in Indonesia

Aam¹,

Mimma

Syahdatul

2022

IEM

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In the midst of economic challenges and uncertainty due to the pandemic, BPRS as part of the banking industry has a specific goal, namely to provide financial services and products to people with a weak economic level and also the MSME sector, therefore it is necessary to accelerate improvements in the Islamic rural banks (BPRS) industry. This study aims to measure the relative efficiency level of BPRS in Indonesia, see the impact of the pandemic on BPRS operations and compare the efficiency level of BPRS spread across Java and outside Java. This study uses a sample of 92 BPRS in Indonesia with an observation period from 2016 to 2021. This research method uses Data Envelopment Analysis (DEA) with secondary data sourced from the financial statements of each BPRS on the OJK official website. The input variables used include third-party funds, fixed assets and operating expenses. Meanwhile, the output variable consists of financing provided and operating income. The results showed that the average BPRS in Indonesia from the 2016-2021 period fluctuated. Then the CRS and VRS analysis found that BPRS outside Java were more efficient than BPRS spread across Java. Then, based on the trend analysis, the efficiency of BPRS in Indonesia has a fluctuating trend. Furthermore, in the efficiency analysis during the Covid-19 pandemic, there was a continuous decline in the efficiency level of the BPRS, although the decline that occurred was still small. This study also analyzes the potential improvement for program improvement that causes inefficiency of the input and output variables. And in general, the biggest cause of BPRS inefficiency comes from the output variable, namely the financing provided. This study also provides recommendations to BPR practitioners, regulators, and academics as a basis for decision making in achieving optimal efficiency and for further research

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Section: Previous Studiesmentioning

confidence: 99%

Non-parametric Efficiency of Islamic Rural Banks in Indonesia

Aam¹,

Mimma

Syahdatul

2022

IEM

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“…Then (Jatmiko, 2017) examines whether ownership structure affects the technical efficiency of Rural Bank and Islamic Rural Bank in Indonesia. Sandono measures technical efficiency and identifies the factors causing inefficiency at Islamic Rural Bank in East Java (Sadono, 2017). Devi & Firmansyah investigated the direct and indirect effects of macroeconomic variables on financial distress by using the efficiency variable as a mediator (Devi, A., & Firmansyah, 2018).…”

Section: Introductionmentioning

confidence: 99%

Efficiency Analysis of Gold Pawn in Islamic Commercial Banks in Indonesia

Haidar,

Hendrasto,

Herindar

2023

Khatulistiwa

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The purpose of this study is to examine the efficiency of the Islamic banking business in Indonesia, specially Islamic Rural Bank in Central Javas. As a component of Indonesia's Islamic banking ecosystem, it is critical to understand the extent those banks work optimally together to support the development of Islamic finance, particularly during the Covid-19 pandemic, and to realize public welfare, particularly through productive financing consistent with Sustainable Development Goals Objectives. In the periode of 2016 until 2020, this study examined a sample of 20 Islamic Rural Banks in central Java. The study was conducted using a non-parametric approach known as DEA (Data Envelopment Analysis). The intermediation strategy was used to determine the input and output variables in this study. Fixed assets, operational costs, and third-party money are included as input variables. Meanwhile, the output variable is made up of the quantity of finance granted and the amount of operating income earned. The findings of this study reveal that the efficiency of Islamic Rural Bank in Central Java has a shifting tendency across the 2016–2020 timeframe, with the average bank experiencing a decline in efficiency during the COVID-19 pandemic. Additionally, this study assesses the possibility for improvement of inefficient programs using input and output data. The primary source of inefficiency is in the output variable, particularly in terms of customer financing. Additionally, this research makes recommendations to a variety of stakeholders, including practitioners, academics, and regulators.

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“…Research of Islamic rural banks' efficiency was conducted by Hosen & Muhari (2013) and Sadono (2017). However, both research is still limited, because the research done by Hosen & Muhari (2013) only employed the data collected from June 2011-December 2012, and Sadono (2017) only analyzed Islamic rural banks in East Java, so that data generated could not represent the population of Islamic rural banks in Indonesia for a long period. In that, this research intends to broaden and complement literatures of small bank efficiency, or Islamic rural bank, as one of the considerations to make decision for policy makers.…”

Section: Introductionmentioning

confidence: 99%

The Efficiency of Indonesian Islamic Rural Banks: A Stochastic Frontier Analysis

Agustina

Sholihin

Fithria

2019

ijief

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Banking plays an important role in economy acting as an intermediation institution and funding sources for business. When a bank is inefficient in the use of cost, there will be improperly used input, hindering the bank to realize its roles, functions, and objectives. Therefore, analysis of bank efficiency is strongly required. This study aims to measure and analyze the technical efficiency of Indonesian Islamic rural banks by using balanced panel data of Indonesian Islamic rural banksfromquartile I 2011 to quartile IV 2016. The sample includes 58 Islamic rural banks with total 1,392 observations. By using stochastic frontier analysis,the result shows that the average technical efficiency of IndonesianIslamic rural banksreached 86 percent and there are still 14 percent that can be optimized. Overall, the average efficiency of Indonesian Islamic rural banksincreases over the research period. In addition, this study also finds that big banks are more efficient than small banks.

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Efficiency of Islamic Rural Banks (BPRS) in East Java Province, Indonesia

Cited by 4 publications

References 10 publications

Non-parametric Efficiency of Islamic Rural Banks in Indonesia

Non-parametric Efficiency of Islamic Rural Banks in Indonesia

Efficiency Analysis of Gold Pawn in Islamic Commercial Banks in Indonesia

The Efficiency of Indonesian Islamic Rural Banks: A Stochastic Frontier Analysis

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