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September 28, 2025Golden Ratio of Finance ManagementOpen Access

Liquidity Risk and The Impact of Credit Growth on Profitability in Rural Banks: The Moderating Role of Bank Size

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Authors

AAAmir AbadiLLL. Lutfi

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Overview

Analysis shows that liquidity risk affects profitability in rural banks, suggesting size modulates credit growth's impact.

Key Points

  • Liquidity management is closely linked to higher profitability, highlighting its importance in rural banks.
  • The study found that credit growth alone can reduce profitability, but its effect varies based on bank size.
  • Larger banks are shown to better withstand the risks associated with rapid credit expansion compared to smaller banks.
  • Regulators should take bank size into account when designing supervisory frameworks for rural banking institutions.

Cite This Study

Abadi et al. (2025) studied this question.

synapsesocial.com/papers/68d90a0141e1c178a14f5f19https://doi.org/10.52970/grfm.v5i2.1569
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Also Consider

Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context:

  1. 1THE INFLUENCE OF LDR AND NPL ON THE PROFITABILITY OF RURAL BANKS: A SYSTEMATIC LITERATURE REVIEW (2021–2025)2025
  2. 2Risk, Liquidity, and Performance: Evidence from the Commercial Banks in Bangladesh2025
  3. 3The Effect of Credit Risk on the Financial Stability of Rural Credit Banks in West Java: The Mediating Role of Profitability2025
  4. 4Determinants of Liquidity in Rural Banks (BPR) in East Java, Indonesia2025
  5. 5Internal Financial Determinants of Profitability: Evidence From Rural Banks in Indonesia2025 · 1 citations