Leveraging intellectual capital and MSME credit to drive rural bank performance: Insights from Jambi Province, Indonesia

This study explores the impact of Intellectual Capital and MSME (Micro, Small, and Medium Enterprises) credit on the performance of rural banks in Jambi Province, Indonesia, with a focus on their role in promoting business growth. Using panel data regression analysis, the study applies three models—Pooled Least Squares (PLS), Common Effect Model (CEM), and Random Effect Model (REM)—to analyze data from rural banks. The results show that both Intellectual Capital and MSME credit significantly affect bank performance, both individually and together. Intellectual Capital contributes by enhancing employee skills and professionalism, while MSME credit supports business development. The study is limited to rural banks in Jambi, which may affect the generalizability of the findings, and the use of cross-sectional data limits causal conclusions. Future research should expand the geographic scope and use longitudinal data to observe long-term trends. The findings suggest that investing in human capital and managing MSME credit strategically can strengthen rural bank performance. This research contributes new insights into how Intellectual Capital and MSME credit influence rural banking, offering practical implications for bank managers and policymakers aiming to improve financial inclusion and regional economic growth.