Financial distress risk in sharia rural banks: Interactions of ratios and macroeconomics

Aprelia, Nala Widya and Miranti, Titis ORCID: https://orcid.org/0000-0002-8720-3809 (2026) Financial distress risk in sharia rural banks: Interactions of ratios and macroeconomics. Iqtishoduna: Jurnal Ekonomi dan Bisnis Islam, 22 (1). pp. 104-123. ISSN 1829-524X

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Abstract

This study aims to determine the extent to which financial ratios can predict financial distress in BPRS on the island of Java. It also examines the influence of Third Party Funds (DPK) and inflation in moderating the relationship between financial ratios and financial distress. The independent variables include solvency, profitability, efficiency, liquidity, and leverage ratios. The population for this study is BPRS located on the island of Java, with a sample size of 82 BPRS. The study period covers the years 2019-2024, resulting in 492 observations. Data analysis uses panel data regression and Moderated Regression Analysis (MRA). The results show that, partially, solvency, profitability, efficiency, liquidity, and leverage ratios have not been able to explain financial distress in BPRS on the island of Java. In addition, it is found that DPK and inflation are able to moderate the variables of solvency, profitability, efficiency, and leverage toward financial distress. However, they cannot moderate the influence of the liquidity ratio on financial distress. This study illustrates that model complexity can provide different policy directions regarding the resilience of BPRS in facing economic developments.

Item Type:	Journal Article
Keywords:	financial ratio; financial distress; sharia rural bank; dpk; inflation
Subjects:	14 ECONOMICS > 1403 Econometrics > 140302 Econometric and Statistical Methods 14 ECONOMICS > 1403 Econometrics > 140304 Panel Data Analysis 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1502 Banking, Finance and Investment > 150201 Finance 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1502 Banking, Finance and Investment > 150202 Financial Econometrics
Divisions:	Faculty of Economics > Department of Islamic Banking
Depositing User:	Titis Miranti
Date Deposited:	23 Oct 2026 14:57

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