MACRO ECONOMICS FACTORS AND BANK LENDING BEHAVIOUR IN INDONESIA

This study examines the influencing macro economics factor in lending distribution and observes the comparison of each factor based on lending type which are investment, working capital and domestic consumption lending. Using data of Indonesian commercial banks between 2003-2011 and a balanced panel method, it finds that bank liquidity and inflation rate have significant negative effect, while number of banks has strong positive influence to stimulate lending distribution. Moreover, saving rate and GDP growth were found not meaningfully contributed to change investment lending distribution, but they significantly influenced the other lending distribution. Lastly, reserve requirement and exchange rate did not significantly influence all lending type.