Analysis of the Credit Policy of Banking Companies Listed on the LQ45 Index on the Indonesia Stock Exchange for the November 2021 Period

Abstract


INTRODUCTION
Bank is one of the business entities that has the main task of collecting funds from the public in the form of demand deposits, savings and deposits and then channeling these funds to people in need in the form of credit. When allocating funds in the form of credit, the bank must have confidence based on an in-depth analysis of the debtor's ability and ability to repay the credit according to the agreed agreement. Credit disbursed by the bank has risks so that in its implementation the bank must establish sound credit principles.
In allocating funds, the bank must be able to determine from the various alternatives available. As stated by According to Hariyani (2010: 58) as it is known that the essential element of bank credit is the trust of the bank as a creditor to borrowing customers as creditors to borrowing customers as debtors. Credit activities are a series of main activities of commercial banks. In credit policy, there are various issues as stated by Sawaldjo Puspopranoto (2004:138), namely credit volume, credit mix, cost of credit, and other factors. Credit costs are costs that will be charged to credit facilities and several other factors that become issues in credit policies such as credit arrangements, bank administration and debtors.
For this study, the authors describe credit policies with banking companies listed on the Indonesia Stock Exchange through a comparison between asset allocation for credit and asset allocation for the whole. The condition of the company can be seen using one of the factors, namely the liquidity factor. The stability of the company's own liquidity position can demonstrate the bank's ability to meet its shortterm obligations. The liquidity used in this study was measured using the ratio of NPL (Non-Performing Loan) and LDR (Loan to Deposit Ratio). Where the independent variables are the two ratios and the dependent variable is credit policy. Then the data used for this study is secondary data from banking companies included in the LQ45 index group from 2015-2020 in the November 2021 period, the data is then processed using multiple linear regression to determine the effect of the independent variable on the dependent variable.

LITERATURE REVIEW
Law of the Republic of Indonesia Number 10 1998 article 1 (2) states that a Bank is a business entity that collects funds from the public in the form of savings and distributes them to the public in the form of credit and or other forms in order to improve the standard of living of the people at large.
The word credit comes from the Roman word "credere" which means to believe, credit can also be interpreted as giving achievements (eg money, goods) with a return for achievements (contra-achievements) that will occur in the future (Dwi Riyadi, 2009). Kasmir (2002:92), defines financing as the provision of money or an equivalent claim, based on an agreement or agreement between the bank and another party that requires the party being financed to return the money or bill after a certain period of time with compensation or profit sharing. According to Sawaldjo Puspopranoto (2004:137), credit is a vital activity in the banking industry. The role of this credit is reflected in the allocation of bank funds and the large share of income from the credit portfolio in the total income obtained by the bank. In addition, the credit function generally bears the greatest risk. Commercial bank failures are usually related to problems in the credit portfolio and less often caused by the shrinking value of other assets.
According to Van Horne and Wachowicz (2012: 205), liquidity is: "The ratio used to measure the company's ability to meet its shortterm obligations. This ratio compares short-term liabilities with short-term resources (current assets) available to meet these short-term obligations. " According to Kasmir (2012: 110), the definition of liquidity is: short-term liabilities (debt). Not much different from the opinion above, according to Subramanyam (2012: 185) the definition of liquidity is: "Liquidity is the company's ability to meet its financial obligations that must be met immediately (short term)" According to Herman Darmawi (2011:16) the notion of non-performing loan (NPL) is one of the measurements of the bank's business risk ratio which shows the magnitude of the risk of non-performing loans that exist in a bank. Understanding Loan to Deposit Ratio (LDR) according to Martono (2002:82) states that: "Loan to Deposit Ratio is a ratio to determine the ability of banks to repay obligations to customers who have invested their funds with credits that have been given to debtors." Meanwhile, according to According to Mulyono (2001:101), the Loan to Deposit Ratio (LDR) is a comparison ratio between the amount of funds distributed to the public (credit) with the amount of public funds and own capital used. Loans This ratio describes a bank's ability to repay withdrawals made by depositors by relying on loans as a source of liquidity.

RESEARCH METHOD
The data used in this study is secondary data, namely data on the financial statements of banking companies included in the LQ45 stock group for the 2015

RESULT AND ANALYSIS
Based on the method that will be used in this study, which has been described in the previous chapter, this chapter will discuss the results of the research methodology in explaining  Figures 4.1, 4.2, and 4.3.
Based on the results of hypothesis testing, the multiple linear regression model in this study can be formulated as follows: Ƴ = + 1 1 + 2 2 + Where X1 is Non Performing Loan, with X2 is Loan to Deposit Ratio with the dependent variable is credit policy. It is known that all independent variables affect credit policy with a significance level of 5%, so the linear regression equation model is as follows: Ƴ = + 1 1 + 2 2 + Ƴ = + (0,652)1 + (0,021)2 + 1,892