This
study aims to evaluate the financial performance (profitability), credit risk,
and liquidity of BPR and BPRS before and during the pandemic. The study focuses
on analyzing the impact of credit risk and liquidity on profitability and the
moderating effect of the guarantee interest rate on liquidity in relation to
the financial performance of BPR and BPRS. A
total sample of 1,349 BPR and 153 BPRS across Indonesia was analyzed using
Stata software. The research employed quantitative methods to test the proposed
hypotheses regarding the relationships between credit risk, liquidity, and
profitability, while assessing the moderating role of the guarantee interest
rate. The findings show that NPL/NPF significantly affects the financial
performance (ROA) of BPR and BPRS, with an increase in NPL/NPF negatively
impacting profitability. Additionally, the guarantee interest rate strengthens
the positive relationship between LDR/FDR and ROA, indicating that higher
interest rates improve fund management and financial performance. This
study contributes to the literature by highlighting the significant role of
credit risk management and the importance of interest rate moderation in
enhancing the financial stability and profitability of BPR and BPRS. It also emphasizes
the differences in risk management approaches between BPR and BPRS, especially
during economic downturns like the pandemic.
