Analysis of Determining the Level of Efficiency of Folk Credit Banks in Medan

Oct 13, 2025 by magicalceylontours.com 145 views

Analysis of Determining the Level of Efficiency of Folk Credit Banks in Medan

Introduction

The People's Credit Bank (BPR) plays a crucial role in providing financial services to the community, particularly in rural areas. In Medan, BPRs have been operating for several years, serving the needs of micro, small, and medium-sized enterprises (MSMEs). However, the efficiency of BPRs in Medan has been a concern, with some studies indicating that they have been operating at a loss. This study aims to examine the determination of the level of efficiency of BPRs in Medan and to identify the factors that contribute to their performance.

Background

The BPR is a type of financial institution that provides credit to MSMEs, which are often unable to access credit from commercial banks. BPRs are required to maintain a minimum capital of IDR 200 million and to have a minimum of 50% of their assets in the form of loans to MSMEs. In Medan, there are several BPRs that operate in the city, providing financial services to the community.

Methodology

This study uses secondary data obtained from Bank Indonesia, specifically from the Regional Representative Office IX (North Sumatra & Aceh). The data used in this study include financial statements of BPRs in Medan for the period of 2010-2018. The analysis method used is descriptive-comparative using the analysis table.

Results

The results of this study show that in the years before 2013, BPRs in Medan were inefficient. This is evidenced by the ratio of BOPO (B ** O ** Perani to ** P ** income ** O ** Peraning) which reaches 100.29%, higher than the expected efficiency indicator of 95, 92%. This indicates that BPRs in Medan spent more operational costs compared to the operating income generated.

However, there was a significant trend in improving performance in 2013. The BOPO ratio in that year declined dramatically to 93.06%, lower than previous years. This decline shows that BPRs in Medan began to show signs of efficiency and were able to manage operational costs better.

Factors Contributing to Efficiency

Several factors may have contributed to the improvement in efficiency of BPRs in Medan. These include:

*** Improvement of Operational Strategies: BPRs may have made changes to their operational strategies, such as efficiency in the use of resources, reducing operational costs, and increasing the efficiency of work processes.***

*** Improving the Quality of Human Resources: BPRs may have improved the quality of their human resources through training and development, thereby increasing efficiency in carrying out their duties.***

Increasing Awareness of Efficiency: Increasing awareness of the importance of efficiency among BPR management can encourage them to focus more on efficiency efforts.

Recommendations

Although BPRs in Medan have shown improvement in efficiency, it is still necessary to monitor and evaluate regularly to ensure the sustainability of efficiency. Some recommendations that can be applied are:

*** Strengthening Corporate Governance: Good company governance will assist BPRs in managing risk and increasing operational efficiency.***

*** Increasing the Use of Technology: The use of technology can help BPRs in increasing the efficiency and effectiveness of work processes, such as the use of management information systems (SIM) to manage data and operations.***

Improving Human Resource Competencies: Increasing human resource competencies through training and development will improve BPR performance and encourage efficiency achievement.

Conclusion

In conclusion, this study has shown that BPRs in Medan have been operating at a loss in the years before 2013. However, there was a significant trend in improving performance in 2013. Several factors may have contributed to this improvement, including the improvement of operational strategies, improving the quality of human resources, and increasing awareness of efficiency. Recommendations have been made to ensure the sustainability of efficiency, including strengthening corporate governance, increasing the use of technology, and improving human resource competencies.

Limitations of the Study

This study has several limitations. Firstly, the data used in this study are secondary data obtained from Bank Indonesia, which may not be comprehensive or accurate. Secondly, the analysis method used is descriptive-comparative, which may not be able to capture the complexity of the issue. Finally, the study only focuses on BPRs in Medan and may not be generalizable to other regions.

Future Research Directions

Future research directions may include:

*** Investigating the Impact of Efficiency on BPR Performance: This study may investigate the impact of efficiency on BPR performance, including the impact on loan growth, deposit growth, and profitability.***

*** Examining the Role of Corporate Governance in BPR Efficiency: This study may examine the role of corporate governance in BPR efficiency, including the impact of board composition, ownership structure, and corporate governance practices on BPR efficiency.***

*** Investigating the Use of Technology in BPR Efficiency: This study may investigate the use of technology in BPR efficiency, including the impact of management information systems (SIM) on BPR efficiency.***

By continuing to improve performance and efficiency, BPRs in Medan can be an important pillar in regional economic growth. This will have a positive impact on the community, especially in the MSME sector which requires capital access.
Frequently Asked Questions (FAQs) on the Analysis of Determining the Level of Efficiency of Folk Credit Banks in Medan

Q: What is the main focus of this study?

A: The main focus of this study is to examine the determination of the level of efficiency of the People's Credit Bank (BPR) in Medan and to identify the factors that contribute to their performance.

Q: What data were used in this study?

A: The data used in this study are secondary data obtained from Bank Indonesia, specifically from the Regional Representative Office IX (North Sumatra & Aceh).

Q: What is the BOPO ratio, and how is it used in this study?

A: The BOPO ratio is a measure of the efficiency of BPRs, which is calculated by dividing the operating expenses by the operating income. In this study, the BOPO ratio is used to determine the level of efficiency of BPRs in Medan.

Q: What were the results of this study?

A: The results of this study show that in the years before 2013, BPRs in Medan were inefficient, with a BOPO ratio of 100.29%. However, there was a significant trend in improving performance in 2013, with a BOPO ratio of 93.06%.

Q: What factors may have contributed to the improvement in efficiency of BPRs in Medan?

A: Several factors may have contributed to the improvement in efficiency of BPRs in Medan, including the improvement of operational strategies, improving the quality of human resources, and increasing awareness of efficiency.

Q: What recommendations were made to ensure the sustainability of efficiency?

A: Recommendations were made to ensure the sustainability of efficiency, including strengthening corporate governance, increasing the use of technology, and improving human resource competencies.

Q: What are the limitations of this study?

A: This study has several limitations, including the use of secondary data, the descriptive-comparative analysis method, and the focus on BPRs in Medan.

Q: What are the future research directions?

A: Future research directions may include investigating the impact of efficiency on BPR performance, examining the role of corporate governance in BPR efficiency, and investigating the use of technology in BPR efficiency.

Q: What are the implications of this study for BPRs in Medan?

A: The implications of this study for BPRs in Medan are that they need to continue to improve their performance and efficiency to remain competitive in the market. This can be achieved by strengthening corporate governance, increasing the use of technology, and improving human resource competencies.

Q: What are the implications of this study for policymakers?

A: The implications of this study for policymakers are that they need to provide support and guidance to BPRs in Medan to help them improve their performance and efficiency. This can be achieved by providing training and development programs for BPR staff, and by providing access to technology and other resources that can help BPRs to improve their efficiency.

Q: What are the implications of this study for the community?

A: The implications of this study for the community are that BPRs in Medan can play a more important role in providing financial services to the community, particularly in the MSME sector. This can help to promote economic growth and development in the region.