Non-Performing Loans: Endogenous Constraint on the Credit–Growth Nexus

Asian Economic and Financial Review

article

Idah Zuhroh¹  Mochamad Rofik¹  Muhammad Sri Wahyudi Suliswanto¹ 

[1] Economics Department, Faculty of Economics and Business, Universitas Muhammadiyah Malang

关键词: Bank credit;    Non-performing loans;    Economic growth;    Endogenous constraint;    Monetary;    Fiscal;    Policy.;   

DOI  :  10.55493/5002.v12i8.4584

学科分类：社会科学、人文和艺术（综合）

来源: Asian Economic and Social Society

【 摘 要 】

This study explores the possibility of a lag in the transmission of credit channeling and non-performing loans to economic growth in Indonesia. The autoregressive distributed lag (ARDL) model was applied to yearly data from 2003 to 2020 and endogenous constraint (EC) was used as a dynamic indicator of credit channeling and non-performance on growth. The model shows that economic growth in Indonesia is positively and significantly affected by credit channeling in years t-1 and t-3; meanwhile, non-performing loans in the current year (year t) suppress the growth. Therefore, from the perspective of the crisis phase, the first step that the monetary and fiscal authorities need to take is to tackle the increase in non-performing loans. It was also concluded that the endogenous constraint (EC) score can be used as a leading dynamic indicator in monetary and fiscal policy during the prosperity phase but is inefficient during a crisis.

【 授权许可】

CC BY