The Role of Loan Quality In the Relationship of Financial Performance, Business Volume and Profitability of Village Credit Institution in Denpasar Regency.

ABSTRACT : village credit institutions performance varies in terms of the profitability and assets, this indicates a difference in capital structure, the use of third party funds in loan financing and the ability to maintain loan quality have an impact on the profitability of village credit institution sassets. This research was conducted on 34 LPDs operating in the Denpasar city area for the 2017-2018 period. The sample determination method is used saturated sample, and data collection is done by collecting financial statements owned by the village credit institutions and analyzed using the Moderated Regression Analysis (MRA) method. The results show that capital structure, loan to deposit ratio, and loan volume have a positive and significant effect on the profitability of village credit institutions assets, while credit quality (NPL) plays a role in improving the relationship of financial performance variables to asset rentability. The results of the study suggest that LPDs improve management competence in managing the source of funds entrusted by pakraman villagers and ensuring the validity and accuracy of the reported financial statements and improving the performance of the village credit institutions so that they are able to serve the community well.
KEYWORDS :Capital Structure, Loan to Deposit Ratio, Business Volume, Non-performing loans, Assets