This study aims to analyze the efficiency performance of conventional and Islamic rural banks in Indonesia, specifically, Bank Perkreditan Rakyat (BPR) and Bank Pembiayaan Rakyat Syariah (BPRS). Using a DEA approach, the results indicate that both BPR and BPRS are still inefficient in terms of the intermediation role but are efficient in production. Furthermore, the Tobit estimation show that these two efficiency results are positively affected by location and the capital adequacy ratio (CAR). These rural banks operating in cities tend to have a higher level of efficiency than otherwise. Moreover, the higher the capital, the more efficient both Islamic and conventional rural banks in terms of production and intermediation.

Original languageEnglish
Article numbere04390
Issue number7
Publication statusPublished - Jul 2020


  • Banking
  • Conventional and Islamic rural bank
  • Corporate finance
  • Data envelopment analysis
  • Econometrics
  • Efficiency
  • Financial economics
  • Microeconomics
  • Tobit


Dive into the research topics of 'Financial performance of rural banks in Indonesia: A two-stage DEA approach'. Together they form a unique fingerprint.

Cite this