Infrastructure loans boost regional bank performance but lower liquidity, study finds.
The article examines how offering infrastructure loans in Indonesian regional development banks affects their financial performance. By analyzing data from 24 banks over 2009-2016, the study found that banks perform better when they provide infrastructure loans, leading to improved profitability and cost management. However, this comes at the expense of lower liquidity. Working Capital and Consumptive Loans contribute to non-performing loans, but long-term loans, including infrastructure loans, can help reduce non-performing loans.