Do Character, Capacity, Capital, Collateral, and Conditions as Affect on Bad Loans

Authors

  • Ega Saputra Local Government Finance Office of Seluma Regency, Bengkulu Province, Indonesia
  • Siti Resmi Sekolah Tinggi Ilmu Manajemen YKPN Yogyakarta, Indonesia
  • Hari Nurweni Sekolah Tinggi Ilmu Manajemen YKPN Yogyakarta, Indonesia
  • Tri Utomo Prasetyo Sekolah Tinggi Ilmu Manajemen YKPN Yogyakarta, Indonesia

DOI:

https://doi.org/10.38035/jafm.v1i3.17

Keywords:

bad loans, character, capacity, condition, capital, collateral

Abstract

Research on the analysis of the use of 5 C (character, capacity, capital, collateral, and condition) in lending has been carried out. Analysis of lending is mostly seen from the perspective of lenders (banks or other lending institutions). In contrast to research in general, this study aims to analyze bad loan from the borrower perspective. This study examines and analyzes the effect of character, capacity, capital, collateral, and conditions (5C) on bad loans. This study uses primary data through questionnaires. The population is the borrower of funds in the Technical Service Unit at Local Government Finance Office, Sleman Regency, Yogyakarta Province, Indonesia. The sample was determined using purposive sampling and 105 respondents were obtained. Purposive sample criteria are fund borrowers who have difficulty in repaying loans and are included in the monitoring agenda. The results of the study prove that the character, capacity, and conditions affect on bad loans, while capital and collateral have no effect on bad loans

References

Apriana, S., Wahyu, D., & Irwansyah. (2017). Analisis Pengaruh Prasyarat Kredit (5C) terhadap Kelancaran Pembayaran Angsuran Nasabah di Bank Kalsel Unit Sentra Antasari Banjarmasin. Jurnal Bisnis Dan Pembangunan, 6(1), 10–18.

Bharath, S. T., & Shumway, T. (2008). Forecasting default with the Merton distance to default model. Review of Financial Studies, 21(3), 1339–1369. https://doi.org/10.1093/rfs/hhn044

Caglio, C., Darst, R. M., & Parolin, E. (2019). Half-full or half-empty? Financial institutions, CDS use, and corporate credit risk. Journal of Financial Intermediation, 40(March). https://doi.org/10.1016/j.jfi.2019.03.001

Ernawati. (2014). Analisa Pengaruh Penilaian Prinsip 5C terhadap Non Performing Loan pada PT Bank Rakyat Indonesia (Persero) Tbk KCP Baranangsiang Bogor. Institut Pertanian Bogor.

Ferri, G., Murro, P., Peruzzi, V., & Rotondi, Z. (2019). Bank lending technologies and credit availability in Europe: What can we learn from the crisis? Journal of International Money and Finance, 95, 128–148. https://doi.org/10.1016/j.jimonfin.2019.04.003

Fungáčová, Z., Shamshur, A., & Weill, L. (2017). Does bank competition reduce cost of credit? Cross-country evidence from Europe. Journal of Banking and Finance, 83, 104–120. https://doi.org/10.1016/j.jbankfin.2017.06.014

Gujarati, D. N., & Porter, D. C. (2009). Basic Econometrics (5th ed.). New York: McGraw-HiII.

Hainz, C., Weill, L., & Godlewski, C. J. (2013). Bank Competition and Collateral: Theory and Evidence. Journal of Financial Services Research, 44(2), 131–148. https://doi.org/10.1007/s10693-012-0141-3

Hair, J. F. J., Black, W. C., Babin, B. J., & Anderson, R. E. (2009). Multivariate Data Analysis (7th ed.). https://doi.org/10.1016/j.foodchem.2017.03.133

Hasibuan, M. S. (2006). Dasar-dasar Perbankan. Jakarta: Bumi Aksara.

Indah, W. K. (2019). Analisis Kredit pada UPT Pengelolaan Dana Penguatan Modal (PDPM) BKAD Kabupaten Sleman. Universitas Gadjah Mada.

Koch, T. W., & MacDonald, S. S. (2015). Bank Management (8th ed.). https://doi.org/10.1108/eb002056

Margaritis, D., & Psillaki, M. (2010). Capital structure, equity ownership and firm performance. Journal of Banking and Finance, 34(3), 621–632. https://doi.org/10.1016/j.jbankfin.2009.08.023

Moro, A., Lucas, M. R., & Kodwani, D. (2012). Trust and the Demand for Personal Collateral in SME - Bank Relationships. Trust and the Demand for Personal Collateral in SME - Bank Relationships, 16(1), 57–79.

Mukhsinati, S. (2011). Analisis Faktor-faktor Penyebab Terjadinya Kredit Macet pada Bank “X” di Kabupaten Jember (Universitas Jember). https://doi.org/10.16194/j.cnki.31-1059/g4.2011.07.016

Noor, P. N. H. (2016). Analisis Faktor-faktor yang Mempengaruhi Kredit Macet pada Bank Pengkreditan Rakyat Artha Pamenang Warujayeng. Universitas Nusantara PGRI Kediri.

Sinkey, J. F. (1989). Commercial Bank Financial Management in the Financial Industry (3rd ed.). New York: MacMilan.

Wiyono, G. (2011). Merancang Penelitian Bisnis dengan Alat Analisis SPSS 17.0 & SmartPLS 2.0. Yogyakarta: UPP STIM YKPN.

Wooldridge, J. M. (2016). Introductory Econometrics (6th ed.). Boston: Cengage Learning.

Downloads

Published

2020-07-02

How to Cite

Saputra, E., Resmi , S. ., Hari Nurweni, & Tri Utomo Prasetyo. (2020). Do Character, Capacity, Capital, Collateral, and Conditions as Affect on Bad Loans. Journal of Accounting and Finance Management, 1(3), 93–100. https://doi.org/10.38035/jafm.v1i3.17

Issue

Vol. 1 No. 3 (2020): Journal of Accounting and Finance Management (July-August 2020)

Section

Articles

License

Authors who publish their manuscripts in this journal agree to the following conditions:

  1. The copyright on each article belongs to the author(s).
  2. The author acknowledges that the Journal of Accounting and Finance Management (JAFM) has the right to be the first to publish with a Creative Commons Attribution 4.0 International license (Attribution 4.0 International (CC BY 4.0).
  3. Authors can submit articles separately, arrange for the non-exclusive distribution of manuscripts that have been published in this journal into other versions (e.g., sent to the author's institutional repository, publication into books, etc.), by acknowledging that the manuscript has been published for the first time in the Journal of Accounting and Finance Management (JAFM).