| Summary: | Many people have financial problems at some point or another. Usually, financial difficulties start when a person expenses become greater than their income. Demand for personal loans increasing day by days. Personal loans are loans that are raised for personal use of an individual and money’s borrow to meet personal needs. Most nationalized, foreign and co-operative banks offer personal loans. Besides banks, other financial companies and institutions also offer the same loans. Most people begin with comparing the interest rate and term of loan amongst this financial institution as an initial screening before applying for personal loan.
In this study, the researcher choose Agrobank to study factors affecting total loan financing in Agrobank with selected variable were examined. This research presents the relationship of total loan financing and Inflation Rate, Consumer Price Index (CPI) and Base Lending Rate (BLR) using data from 2006 to 2008. The dependent variable for this study would be total loan financing and the independent variables are Inflation Rate, Consumer Price Index (CPI) and Base Lending Rate(BLR).
The researcher uses SPSS software (version 14.0) to examine the Coefficient of Determination that shows 53.5% changes in loan financing can be explained by the variables that are Inflation rate, Consumer Price Index and Base Lending Rate.
Research also using Durbin Watson test where correlation between independent variables which are Inflation Rate, Consumer Price Index and Base Lending Rate with dependent variable that is the loan financing Agrocash-i to detect the presence of autocorrelation between them. Besides that, researches has use regression coefficient, to prove that all independent variables have positive relationship with loan financing, Agrocash-i.
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