Analysis of factors affecting the non performing loans (npl) of microcredit and its impact on credit channeling in microfinance sector in regional office x of pt. bank xyz

Microbusiness sector, despite facing dynamics in the national economy, is proved to play a role and give significant contribution in boosting the nation’s development because of its strategic position in labor absorption, economic recovery, and in giving equitable employment opportunities. In consequence, microfinance also has experienced rapid development. The purposes of this research were to analyse the transition of loan quality for identifying the collectability of Non Performing Loan (NPL) on microfinance sector in Bank XYZ Regional Office X, to analyze the factors that lead to the NPL in the microfinance in the Bank, and to study the impact of NPL of microcredit on the loan channeling in Regional Office X of Bank XYZ. Descriptive method was selected to obtain an overview of the factors that led to the NPL in Regional Office X of Bank XYZ and its impact on the amount of credit channeling in the micro sector. The logistic regression analysis was used to analyse factors affecting the NPL of the microcredit. The results show that growth in microcredit sector in Bank XYZ has increased every year, as well as in the regional office. Nonetheless, the growth of the NPL is also increasing every year. Age, Income, Plafond, Installment, Tenor, Collateral, Region and Economic Sectors have significantly affected NPL. Microloan channeling is more in villages than in cities. If seen from the results of the analysis, the impact of NPL to microcredit supply should indeed be negative, because the higher the NPL value is the more careful the bank will be in disbursing loans. In average, the frequency of microloan channeling in the villages is higher than in the cities.