The Depth of Outreach in Rural Banks: An Empirical Analysis in West Sumatera Indonesia

Hesi Eka, Puteri (2017) The Depth of Outreach in Rural Banks: An Empirical Analysis in West Sumatera Indonesia. International Journal of Economic Research, 14 (14). pp. 167-180. ISSN 0972-9380

Text 1510314734 IJER.pdf Download (509kB)

References

Abstract

The purpose of this study is to analyze the determinants of the depth of outreach in Rural Banks in Indonesia, which includes profitability, regulation, competition, socio economic culture and religiosity. The study also investigates the trade-off between financial performance and social performance in rural banks and compare the depth of outreach between the Rural Banks and Islamic Rural Banks. This study proved that the depth of outreach is influenced by: (1) Regulation, shown by CAR, (2) Socio-economic, especially commitment to keep increasing the percentage of low-educated clients and percentage of women as clients, (3) Organizational culture, especially for aspects such as: Attention to detail, Team Orientation, Aggressiveness and stability, and (4) Local culture, covering aspects: non-traditional guarantees, local people as marketing personnel and credit advisory. The results also showed that there is a trade-off between social and financial performance in Rural Banks and proved that there is no difference in the depth of outreach between Rural Bank and Islamic Rural Bank.

Actions (login required)

View Item