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Perilaku Penawaran Kredit Bank di Indonesia: Kasus Pasar Oligopoli Periode Januari 2001 – Juli 2005

Author

Listed:
  • Chaikal Nur Yakin

    (FEUI)

  • Perry Warjiyo

    (Bank Indonesia)

Abstract

This paper uses a microeconomic approach to analyze the bank lending behavior in Indonesia during 2001:1 – 2005:7. The loan supply function is derived from the structural loan supply and demand equation in a Cournot-Oligopoly market. We treat the loan supply function as a structural error component of the model, and apply to data of the 15 biggest banks in Indonesia. The proposed hypothesis; the bank engages in the profit maximization, cannot be rejected. This bank behavior is in conjunction with the bank’s interdependency. However, due to the internal inefficiency of the bank, the profit maximization behavior does not reflect the ideal condition of the banking intermediation function, not in the loan volume nor in the lending rate. Moreover, the bank’s lending behavior responds positively with the loan rate, responds negatively on the interest liability (time deposits interest) and respond negatively on the investment alternative (the SBI). In addition, the SBI rate as a monetary policy instrument is not effective to loan interest rate to guide the banks in choosing between these two portfolio investments.

Suggested Citation

  • Chaikal Nur Yakin & Perry Warjiyo, 2006. "Perilaku Penawaran Kredit Bank di Indonesia: Kasus Pasar Oligopoli Periode Januari 2001 – Juli 2005," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 9(2), pages 1-36, October.
    • Handle: RePEc:idn:journl:v:9:y:2006:i:2:p:1-36
    DOI: https://doi.org/10.21098/bemp.v9i2.205
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    Citations

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    Cited by:

    1. Aloysius Deno Hervino, 2011. "Avoiding risk in working capital credit distribution in Indonesia," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 3(2), pages 199-210, April.
    2. M. Shabri Abd. Majid & Sovia Dewi & Aliasuddin & Salina H. Kassim, 2019. "Does Financial Development Reduce Poverty? Empirical Evidence from Indonesia," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 10(3), pages 1019-1036, September.

    More about this item

    Keywords

    Loan; Cournot; interest rate; bank; pool analysis;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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