This paper investigates credit risk management as a dynamic system. Panel Vector Autoregression (PVAR) is employed to model interrelationships among four key components: Non-Performing Loans (NPLs), Loan Loss Provision (LLP), loan charge-off (LCO) and capital. The Cost-to-Income ratio (CIR) and Size and Net Profit-to-Equity ratio (ROE) are used as control variables. The panel dataset comprises 1461 conventional rural banks in Indonesia with a quarterly frequency from June 2010 to March 2024. There are several key findings of this study. First, credit risk management practices in rural banks predominantly follow an incurred loss approach, although the expected loss model appears to be more commonly adopted by larger institutions. Second, capital serves a critical function as a buffer against credit losses. Third, subsample investigation reveals a significant role of accounting discretionary. This study offers significant implications for both policy development and academic research in microfinance.

The evolution of financial technology into digital payment has led to a new era of a cashless society. E-Wallet is an application that facilitates users to make

Sustainability issues have increased the need for stakeholders toward environmental information disclosure. Environmental information is pivotal for stakeholders to assess a firm’s environmental performance. A firm’s environmental performance significantly influences a firm’s environmental properly. This study examines the influence of a firm’s environmental performance on Firm environmental disclosure, moderated by the firm’s characteristics. The study involved fifty listed firms on Indonesia Stock Exchange (IDX) and PROPER participants (Company Performance Rating Program in Environmental Management) from 2017 to 2020. The firm’s characteristics in this study refer to size, profitability, and leverage. The estimated Generalized least square panel regression test indicated that firm environmental performance significantly explains the variance of environmental disclosure. The influence of firm environmental performance on firm environmental disclosure is significantly moderated by profitability and firm size.

The COVID-19 pandemic has impacted the investment climate in the Indonesian capital market, influencing investors’ decisions in choosing resilient stocks during the crisis. Socially responsible stocks are perceived to be more reliable during a crisis than other stocks. This study aims to assess the difference in abnormal returns before and after the five events related to COVID-19 news, using the Banks Sub-Sector representing the finance sector and SRI-KEHATI Index stocks. A purposive sampling technique was used to select samples of 41 stocks of the Banks Sub-Sector and 11 stocks of the SRI-KEHATI index. Data analysis employed various statistical tests, including paired-sample Wilcoxon signed-rank test and paired- sample t-test. The findings of this study indicate various significant abnormal returns and trading volumes for the two classifications. Moreover, this research is intended to explore investor sentiment when facing news that contains content related to the pre-crisis, crisis, and post-crisis situation of COVID-19 in Indonesia, considering previous research conducted reviews of investor sentiment in making general investment decisions has been done. The research results show that investors react differently to each news related to COVID-19. Furthermore, each piece of news triggered both positive and negative investor sentiment.

This study examines the intermediation inefficiency of Indonesian banks in response to macroeconomic shocks. We focus on the effects of real GDP growth (GROWTH), currency depreciation (FX_C), and changes in the policy rate (ΔPOLRATE). We hypothesize that banks’ reactions to these shocks generate inefficiencies in their intermediation activities. To test this hypothesis, we apply a stochastic frontier approach that accommodates time-varying inefficiency to a monthly panel dataset comprising 91 banks from January 2012 to January 2023 (12,103 bank-month observations). The results indicate that macroeconomic shocks significantly contribute to intermediation inefficiency. On average, banks’ intermediation activities exhibited inefficiency levels of 39.0% (median) to 40.8% (mean). Subsample analysis reveals marked heterogeneity across bank sizes, with large banks displaying the lowest inefficiency (27.1%) and small banks the highest (43.1%). Furthermore, inefficiency increased during the COVID-19 period relative to the pre-COVID period.