The Role of Banking in Economic Growth and Development

Oct 13, 2025 by wbrum.org 40 views

The Role of Banking in Economic Growth and Development

Banking plays a vital role in encouraging economic growth and development. As a financial institution, the bank functions as a provider of development financing funds through lending and various investment services. One of the most crucial products in the banking world is Home Ownership Credit (KPR). KPR helps debtors in overcoming lack of capital, managing, and developing businesses. This not only increases efficiency, but also meets the increasing consumption needs of people and strengthens competitiveness in the market.

In today's fast-paced economy, credit granting, including KPR, is a core activity for banks as part of the intermediation function. The credit granting process is not simple; A good internal control system is needed to minimize the risk of bad loans. Without effective internal control, banks are at risk of experiencing significant losses, which in turn can affect the financial and operational stability of the bank itself.

The Importance of Internal Control in Granting Mortgages

Internal control is a system that is designed to provide guarantees that organizational goals will be achieved in an efficient and effective way. In the context of giving mortgages, strong internal control functions to ensure that the debtor selection process is carried out carefully. This includes debtor feasibility analysis, credit history checks, and evaluating payment capabilities.

In-depth credit analysis is the key in identifying a proper debtor and able to pay off loans. By implementing strict internal control, banks can reduce the possibility of bad loans. In addition, good internal control also serves to detect fraud and abuse of authority in the process of granting credit.

Implementation of Internal Control at PT. BNI (Persero) Tbk Medan Branch

At PT. BNI (Persero) Tbk Medan Branch, Internal Control in the granting of mortgages involves a number of steps and procedures. First, there is a clear and transparent credit policy, where all staff involved in this process must comply with. Second, the management information system used to manage debtor data needs to be updated regularly to ensure data accuracy and security.

In addition, training for employees is also an important part of internal control. Trained employees will better understand the importance of the credit and risk analysis process, so they can carry out their duties well. Regular internal supervision and audit is also needed to assess the effectiveness of the existing control system.

The Impact of Internal Control on the Performance of Giving KPR

Solid internal control systems will have a positive impact on the performance of KPR granting at PT. BNI (Persero) Tbk Medan Branch. Banks that have good control can increase public confidence in the KPR products offered. In addition, by minimizing the risk of bad credit, banks will have a more stable cash flow, which supports overall business growth.

Furthermore, bank reputation in terms of safe and controlled credit will attract more customers and investors. This is a positive cycle that will ultimately contribute to economic growth at the local level.

The Benefits of Effective Internal Control

Effective internal control is not only beneficial for the bank itself, but also for the community. By minimizing the risk of bad credit, banks can contribute to economic stability and growth. In addition, good internal control also serves to detect fraud and abuse of authority in the process of granting credit.

Conclusion

Analysis of Internal Control in Giving KPR at PT. BNI (Persero) Tbk Medan Branch shows that effective internal control is very important to minimize the risk of bad credit. By applying good procedures, involving employee training, and conducting regular audits, banks can not only protect their assets, but also contribute to economic stability. Therefore, it is essential for all parties involved to understand and apply the principles of internal control in the process of granting credit, especially in the KPR sector which has a significant role in community development.

Recommendations

Based on the analysis, the following recommendations can be made:

PT. BNI (Persero) Tbk Medan Branch should continue to implement and improve its internal control system to minimize the risk of bad credit.
Employee training and development programs should be implemented to ensure that employees understand the importance of internal control and can carry out their duties effectively.
Regular internal supervision and audit should be conducted to assess the effectiveness of the existing control system.
The management information system used to manage debtor data should be updated regularly to ensure data accuracy and security.

By implementing these recommendations, PT. BNI (Persero) Tbk Medan Branch can improve its internal control system and contribute to economic stability and growth.

Limitations of the Study

This study has several limitations. Firstly, the study only focuses on PT. BNI (Persero) Tbk Medan Branch and may not be generalizable to other banks. Secondly, the study only examines the internal control system of PT. BNI (Persero) Tbk Medan Branch and may not consider other factors that may affect the performance of KPR granting.

Future Research Directions

Future research can build on this study by examining the internal control system of other banks and considering other factors that may affect the performance of KPR granting. In addition, future research can also examine the impact of internal control on the performance of KPR granting in other contexts, such as in rural areas or in developing countries.

Conclusion

In conclusion, this study highlights the importance of internal control in the granting of mortgages. By implementing effective internal control, banks can minimize the risk of bad credit and contribute to economic stability and growth. Therefore, it is essential for all parties involved to understand and apply the principles of internal control in the process of granting credit, especially in the KPR sector which has a significant role in community development.

Q1: What is internal control in the context of KPR granting?

A1: Internal control is a system that is designed to provide guarantees that organizational goals will be achieved in an efficient and effective way. In the context of giving mortgages, strong internal control functions to ensure that the debtor selection process is carried out carefully.

Q2: Why is internal control important in KPR granting?

A2: Internal control is important in KPR granting because it helps to minimize the risk of bad loans. By implementing strict internal control, banks can reduce the possibility of bad loans and detect fraud and abuse of authority in the process of granting credit.

Q3: What are the steps and procedures involved in implementing internal control at PT. BNI (Persero) Tbk Medan Branch?

A3: The steps and procedures involved in implementing internal control at PT. BNI (Persero) Tbk Medan Branch include:

A clear and transparent credit policy
Regular updates to the management information system used to manage debtor data
Employee training and development programs
Regular internal supervision and audit

Q4: How does internal control impact the performance of KPR granting at PT. BNI (Persero) Tbk Medan Branch?

A4: Solid internal control systems will have a positive impact on the performance of KPR granting at PT. BNI (Persero) Tbk Medan Branch. Banks that have good control can increase public confidence in the KPR products offered and minimize the risk of bad credit.

Q5: What are the benefits of effective internal control in KPR granting?

A5: The benefits of effective internal control in KPR granting include:

Minimizing the risk of bad credit
Detecting fraud and abuse of authority in the process of granting credit
Increasing public confidence in the KPR products offered
Supporting overall business growth

Q6: What are the limitations of this study?

A6: This study has several limitations. Firstly, the study only focuses on PT. BNI (Persero) Tbk Medan Branch and may not be generalizable to other banks. Secondly, the study only examines the internal control system of PT. BNI (Persero) Tbk Medan Branch and may not consider other factors that may affect the performance of KPR granting.

Q7: What are the future research directions?

A7: Future research can build on this study by examining the internal control system of other banks and considering other factors that may affect the performance of KPR granting. In addition, future research can also examine the impact of internal control on the performance of KPR granting in other contexts, such as in rural areas or in developing countries.

Q8: What are the recommendations for PT. BNI (Persero) Tbk Medan Branch?

A8: Based on the analysis, the following recommendations can be made:

PT. BNI (Persero) Tbk Medan Branch should continue to implement and improve its internal control system to minimize the risk of bad credit.
Employee training and development programs should be implemented to ensure that employees understand the importance of internal control and can carry out their duties effectively.
Regular internal supervision and audit should be conducted to assess the effectiveness of the existing control system.
The management information system used to manage debtor data should be updated regularly to ensure data accuracy and security.

By implementing these recommendations, PT. BNI (Persero) Tbk Medan Branch can improve its internal control system and contribute to economic stability and growth.