The Effect of Earning Asset Quality and Loan to Deposit Ratio on Non-Performing Loan of Rural Banks: Comparison between before and during the Covid-19 Pandemic

This study aims to analyze the effect of Loan to Deposit Ratio (LDR) and Earning Asset Quality (EAQ) on Non-Performing Loan (NPL) before and during the Covid-19 pandemic. The data used in this study are the quarterly reports of rural banks in Central Java from 174 banks. Data analysis was carried out by comparing multiple linear regressions before and during the Covid-19 pandemic. The results show that the Covid-19 pandemic can strengthen the negative relationship between LDR and NPL, as well as strengthen the positive relationship between EAQ and NPL. LDR before the Covid1-19 pandemic had an insignificant negative effect, but during the pandemic it had a negative and significant effect. Whereas EAQ had a positive effect on NPL both before and during the Covid-19 pandemic.