| 189 | Keywords: Forecasting; Microcredit; Non-performing loans; Spread; Vector Error Correction Model Corresponding Author: Setia Murningsih: Tel. +62 251 862 6435 E-mail: setia_murningsih@apps.ipb.ac.id Jurnal Keuangan dan Perbankan, 24(2): 189–201, 2020 http://jurnal.unmer.ac.id/index.php/jkdp Article history: Received: 2019-12-16 Revised: 2020-02-24 Accepted: 2020-03-19 ISSN: 2443-2687 (Online) ISSN: 1410-8089 (Print) This is an open access article under the CC–BY-SA license JEL Classification: D13, I31, J22 Kata kunci: Peramalan; Mikro kredit; Non-performing loans; Selisih; Vector Error Correction Model Factors influencing Indonesian rural banks’ credit disbursement Setia Murningsih 1 , Muhammad Firdaus 2 , Budi Purwanto 1 1 Department of Management, Faculty of Economics and Management, IPB University 2 Department of Economics, Faculty of Economics and Management, IPB University Jl. Raya Dramaga Kampus IPB Dramaga, Bogor, 16680, Indonesia Abstract Distribution of microcredits has a great opportunity, considering micro-businesses in Indonesia reaches 98 percent of all types of businesses. Microlending has become the leading market share for BPRs to channel their funds. This research aims to identify factors that effect the increase of micro-credit disbursements. This study uses a Vector Error Correction Model (VECM) method with a type of monthly time series data from 2012 to 2018. The sample of this study is the Rural Credit Banks. The results of this study explain that the BPR non-performing loan (NPL) variable, both in the long term and short term, does not significantly influence the increase in micro-credit distribution. In contrast, the variable spread in the short term and long term shows a significant positive effect on increasing microcredit distribution. Fore- casting for variable increases in credit distribution fluctuates with a downward trend. The NPL variable has an increasing trend, and it is projected that the next 90 months will reach 12 percent. The spread variable has a downward trend for the next 40 months which then the trend will continue to increase for the next 90 months. Abstrak Distribusi kredit mikro memiliki peluang besar, mengingat usaha mikro di Indonesia mencapai 98 persen dari semua jenis usaha. Pembiayaan mikro telah menjadi pangsa pasar utama bagi BPR untuk menyalurkan dana mereka. Penelitian ini bertujuan untuk mengidentifikasi faktor- faktor yang mempengaruhi peningkatan penyaluran kredit mikro. Penelitian ini menggunakan metode Vector Error Correction Model (VECM) dengan jenis data deret waktu bulanan dari 2012 hingga 2018. Sampel penelitian ini adalah Bank Perkreditan Rakyat. Hasil penelitian ini menjelaskan bahwa variabel kredit bermasalah BPR (NPL), baik dalam jangka panjang dan jangka pendek, tidak secara signifikan mempengaruhi peningkatan distribusi kredit mikro. Sebaliknya, variabel spread dalam jangka pendek dan jangka panjang menunjukkan pengaruh positif yang signifikan terhadap peningkatan distribusi kredit mikro. Peramalan untuk peningkatan variabel dalam distribusi kredit berfluktuasi dengan tren menurun. Variabel NPL memiliki tren meningkat, dan diproyeksikan bahwa 90 bulan ke depan akan mencapai 12 persen. Variabel spread memiliki tren menurun untuk 40 bulan ke depan yang kemudian tren akan terus meningkat selama 90 bulan ke depan. How to Cite: Murningsih, S., Firdaus, M., & Purwanto, B. (2020). Factors influencing Indo- nesian rural banks’ credit disbursement. Jurnal Keuangan dan Perbankan, 24(2), 189-201. https://doi.org/10.26905/jkdp.v24i2.3778