CAN NON-PERFORMING FINANCING REDUCE BANK ASSET? EVIDENCE FROM ISLAMIC RURAL BANK IN INDONESIA DURING COVID-19

Abstract

This study investigates the variables that affect Islamic Rural Banks assets in 2020 during the covid-19 pandemic. This study uses panel data of Islamic Rural Banks in Indonesia. The data is in the form of quarterly data for 2020 on 128 Islamic banks in Indonesia. This study uses NPF, FDR, OER and GRDP. Based on the results of panel data regression with the Fixed Effect (FE) model, it can be concluded that the NPF variable has a negative and significant effect. Likewise, the FDR variable has a negative and significant effect. OER variable has no effect. PRDB has a positive and significant impact on the assets of Islamic Rural Bank. Thus, the reduced assets of Islamic Rural Bank during the covid-19 pandemic can be affected by NPF .