The Effect of Credit Growth, LDR and Interest Rates on Non-Performing Loans (NPL) in KBMI IV Banks in Indonesia

This study examines the impact of credit growth, Loan to Deposit Ratio (LDR), and interest rates on Non-Performing Loans (NPL) in KBMI IV banks. It uses a quantitative approach with panel data regression and secondary data from annual financial reports and OJK publications. The sample includes banks classified as KBMI IV within a specified period. The results show that credit growth and LDR negatively and significantly affect NPL, indicating that increased lending supported by effective risk management and optimal intermediation can reduce bad loans. Meanwhile, interest rates do not significantly influence NPL, suggesting limited direct impact on repayment ability. Simultaneously, all variables significantly affect NPL, highlighting the importance of selective lending, prudent liquidity management, and appropriate interest rate policies.