Determinants of Liquidity in Rural Banks (BPR) in East Java, Indonesia

This study determines the effect of CAR (Capital Adequacy Ratio), ROA (Return on Assets), LDR (Loan to Deposit Ratio), and firm size (SIZE) on the liquidity of Rural Banks (BPR). Furthermore, the study applies quantitatively. The data collection technique used was purposive sampling, in which the sample was based on the criteria given and was representative. In line with that, 27 BPRs in East Java province were chosen as samples. Moreover, the data were secondary in the form of financial reports that were published and accessed by the public through the official website of the Financial Service Authority (OJK) during 2022-2024. Additionally, the data analysis technique used was multiple linear regression with SPSS version 22. The result indicates that CAR and ROA have a positive and significant effect on liquidity. However, LDR and firm size (SIZE) has an insignificant effect on liquidity. Additionally, the result of the determination coefficient (R2) is 0.482 which shows that 48.2% of liquidity is affected by independent variables (CAR, ROA, LDR, and SIZE). For the rest, liquidity is affected by other variables or factors.