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Semua harus berdasarkan penelitian terdahulu. Cari artikel yang membahas penelitian
serupa yang membahas 3 hipotesis ini. Artikel pendukung bebas (Q nya bebas), boleh dari
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The Influence of Loan Growth on Risk Bank in Conventional bank in Indonesia

Pendahuluan (latar belakang)

Yang harus ada:
 Jelasin peran bank konvensional secara singkat (bahbry)
 Faktor yang membuat bank ingin melakukan peningkatan kredit (Bahbry)
 Data kenaikan kredit di Indonesia
 Data NPL, ROA, EQTA di indonesia seperti apa
 Penelitian2 terdahulu seperti apa, bagaimana, dan hasilnya apa (bahbry)
 Mengapa penelitian ini dilakukan (uniknya apa dan yg membedakan dengan
penelitian serupa lainnya apa) (bahbry)

The Influence of Loan Growth on Risk Bank in Conventional bank in Indonesia

• Explain the role of conventional banks briefly

• Factors that make banks want to increase credit

• What previous research was like, how, and what the results were

• Why was this research conducted (what is unique about it and what differentiates it from other
similar studies)

• Explain the role of conventional banks briefly

Conventional banks play a pivotal role in the financial system by offering traditional banking services
such as deposits, loans, and other financial products to individuals, businesses, and governments.
These banks operate based on established banking principles without involvement in specific
religious or ethical considerations that may guide practices in Islamic banking (Asutay & Othman ,
2022).

The facilitate economic growth by channelling funds from savers to borrowers, encouraging
investments, supporting business expansions, and enabling individuals to make purchases or
investments through various loan and credit facilities. Conventional banks generate revenue
primarily through interest rates charged on loans and by providing a range of financial services like
wealth management, payment processing, and advisory services (Fahrial, 2020).

In the context of Indonesia, conventional banks play a significant role in driving economic activities,
including loan growth. However, excessive loan growth can potentially impact a bank's risk profile.
When banks aggressively expand their lending without proper risk assessment or prudential
measures, it may lead to increased credit risk, liquidity risk, or operational risk. Managing these risks
effectively is crucial for the stability and sustainability of conventional banks in Indonesia or any
financial system ( Faiza Husnayeni Nahar, 2020).
However, understanding how these banks manage and mitigate risks associated with their lending
practices is essential. Factors such as credit evaluation standards, diversification of loan portfolios,
regulatory compliance, and economic conditions play significant roles in determining how loan
growth impacts a bank's risk profile in Indonesia's conventional banking sector.

Banks are motivated to increase credit for several reasons:

economic Growth: Indonesia's growing economy demands access to credit for businesses and
individuals. Banks increase lending to support this economic expansion, facilitating investments and
spending.

Government Policies: Government initiatives or policies aimed at stimulating economic growth

often involve encouraging banks to lend more. This could include programs promoting
entrepreneurship, infrastructure development, or housing projects, incentivizing banks to increase
their lending activities.

Market Competition: Intense competition among banks in Indonesia drives them to offer attractive
loan terms and expand their credit offerings to attract customers. This competition encourages
banks to increase credit availability and improve loan terms to remain competitive.

Financial Inclusion: Initiatives to promote financial inclusion and support marginalized sectors of the
population may push banks to extend credit to previously underserved communities or sectors. This
aligns with government efforts to expand access to financial services.

Consumer Demand: Increasing demand from consumers for various purposes like housing,
education, and consumption fuels banks' willingness to extend credit. This demand-driven necessity
compels banks to increase credit availability to cater to these needs.

Monetary Policy: The central bank's monetary policy, including changes in interest rates or reserve
requirements, can influence banks' lending behaviour. Lower interest rates might incentivize banks
to lend more to stimulate borrowing and economic activity.

Regulatory Compliance: Adherence to regulatory requirements or targets set by the Indonesian

government or central bank could necessitate banks to increase credit to specific sectors or
demographics to meet these obligations.

Risk Appetite and Assessment: Banks' confidence in their ability to assess and manage risks
associated with lending influences their decision to increase credit. With effective risk management
strategies, banks may feel more comfortable extending credit.

These factors collectively contribute to the motivation for Indonesian banks to increase credit,
aligning with economic, regulatory, and competitive dynamics within the country's banking sector.

3.
Research on the influence of loan growth on risk in conventional banks in Indonesia has been
multifaceted, employing diverse methodologies and yielding varied results:

Research Approaches:

Quantitative Analysis:

Many studies utilized quantitative methods, employing financial ratios, regression analyses, and
econometric models. These aimed to measure the relationship between loan growth and risk
indicators such as non-performing loans (NPLs), liquidity ratios, and capital adequacy.

They often examined large datasets from multiple banks over specific periods to identify trends and
correlations between loan expansion and risk.

Qualitative and Case Studies:

Some researchers conducted qualitative studies and case analyses. These delved into the strategies
and practices of individual banks concerning loan growth, risk management policies, and the impact
on their overall risk exposure.

These studies often involved interviews with bank executives or experts to gain deeper insights into
the decision-making processes related to lending and risk management.

Economic and Regulatory Context:

Certain studies focused on the broader economic context and regulatory frameworks. They explored
how macroeconomic factors, like GDP growth rates, inflation, and interest rates, influenced the
relationship between loan growth and bank risk.

Research also examined the impact of regulatory policies and changes in banking regulations on
banks' lending behaviors and risk management practices.

Research Findings:

Positive Correlation between Loan Growth and Risk:

Several studies reported a positive relationship between rapid loan growth and increased bank risk.
They found that aggressive lending often led to higher NPL ratios, liquidity challenges, and credit risk
exposure for banks in Indonesia.

Some research emphasized that periods of extensive loan expansion were associated with higher
probabilities of financial distress for banks.

Risk Diversification and Management:

Contrasting findings highlighted the importance of effective risk management practices and portfolio
diversification. Banks with well-diversified loan portfolios across sectors or borrower types showed
lower vulnerability to risks associated with rapid loan growth.

Studies showcased that banks employing robust risk assessment mechanisms and stringent lending
standards fared better in mitigating risks stemming from increased credit activities.

Economic and Regulatory Impacts:

Research underscored the influence of macroeconomic factors. Economic fluctuations could

significantly impact the risk profiles of banks during periods of rapid loan growth.

Findings also highlighted the pivotal role of regulatory frameworks. Compliance with regulatory
standards, especially related to capital adequacy and risk management, played a crucial role in
moderating the risks associated with loan expansion.

In summary, the body of research surrounding the influence of loan growth on risk in Indonesian
conventional banks has offered nuanced perspectives. While some studies indicated a clear link
between aggressive lending and increased risk, others emphasized the significance of effective risk
management, diversification, and regulatory compliance in mitigating these risks. The varying
methodologies and contextual factors underscored the complexity of this relationship within
Indonesia's banking landscape.

short

Research Approaches:

Methodologies: Studies used quantitative methods like regression analyses and qualitative
approaches such as case studies. They assessed the relationship between loan growth and risk
indicators like non-performing loans, liquidity ratios, and regulatory compliance.

Focus Areas: Research examined macroeconomic factors, regulatory impacts, and internal bank
practices to understand how loan growth affects risk.

Research Findings:

Mixed Results: Some studies found a positive correlation between rapid loan growth and increased
risk, leading to higher non-performing loans and liquidity challenges.

Diversification and Risk Management: Other research highlighted that effective risk management
practices and diversified loan portfolios helped mitigate risks associated with aggressive lending.

Regulatory Influence: Studies emphasized the role of regulations; compliance with regulatory
standards moderated risks linked to loan expansion.
Overall, research revealed a nuanced relationship: while aggressive lending might heighten risks,
sound risk management and adherence to regulations could mitigate these risks for Indonesian
conventional banks.

4.

This research stands out due to its specific focus on Indonesia's conventional banking sector. It
blends quantitative and qualitative methods to understand how loan growth impacts risk in a
country-specific context. It uniquely examines regulatory influences, delves into risk management
strategies, and offers practical insights tailored to Indonesian banking practices.

………………………………………………………………………………………………………………………………………………………….

The research on the influence of loan growth on risk in Indonesian conventional banks was
conducted to address several unique aspects:

Uniqueness and Differentiation:

Contextual Relevance: This research specifically focused on Indonesian conventional banks,

considering the unique economic, regulatory, and cultural factors impacting the banking sector in
Indonesia. It aimed to provide insights tailored to the Indonesian financial landscape.

Diverse Methodologies: The uniqueness lies in employing a blend of quantitative analyses and
qualitative approaches. Researchers used econometric models, regression analyses, and case studies
to capture a comprehensive understanding of the relationship between loan growth and risk.

Regulatory and Economic Dynamics: The study delved into the intricate interactions between loan
expansion, regulatory frameworks, and macroeconomic influences. It sought to unravel how
Indonesian banking regulations and economic fluctuations affected the risks associated with loan
growth.

Risk Management Perspectives: This research focused on evaluating the efficacy of risk
management practices employed by Indonesian banks amid loan expansion. It sought to identify
strategies that effectively mitigated the risks stemming from aggressive lending behaviors.

Practical Implications: The study aimed not only to contribute to academic knowledge but also to
offer practical insights for policymakers, regulators, and banking executives in Indonesia. It provided
actionable recommendations to enhance risk management strategies in the Indonesian banking
sector.
In essence, this research's uniqueness stemmed from its tailored focus on Indonesian conventional
banks, its blend of methodologies, and its emphasis on regulatory and economic dynamics impacting
the relationship between loan growth and bank risk within the Indonesian context.