Effect Of Internal Examination On The Effectiveness Of Credit Control Provision Of PT. Mitradana Madani People's Credit Bank

Introduction

PT. BPR Mitradana Madani Medan is a People's Credit Bank that has been operating since 1997, with a strong focus on providing credit to the public. Located on Jalan Kapten Muslim No. 36A Sei Sikambing, with a branch office on Jalan Wiliem Iskandar No. 120-121 Medan, this bank has been serving the community for over two decades. However, with the increasing competition in the banking industry, it is essential for PT. BPR Mitradana Madani to continuously improve its services and ensure that its credit control provision is effective. This study aims to analyze the effect of internal examination on the effectiveness of credit control provision, as well as the factors that influence the implementation of internal examinations at PT. BPR Mitradana Madani.

Research Questions

This study aims to answer two main research questions. Firstly, how does the effect of internal examination on the effectiveness of loan control control at PT. BPR Mitradana Madani? Secondly, what factors influence internal inspection at the bank? To answer these questions, researchers use theories related to internal examinations that include administrative theory, documentation, and standard operating procedures (SOP) and assessment lists.

Methodology

The method used in this study is quantitative descriptive. This research was conducted using a description and explanatory approach measured on the assessment scale. The sample involved in this study consisted of 51 respondents, and data was collected through questionnaires, interviews, and documentation studies. The analysis method used is simple linear regression and multiple linear regression.

Results

The results of this study showed that there was a significant effect between internal examinations and the effectiveness of credit control control. This was revealed from the first hypothesis which states that internal examinations have a positive impact on the control of credit granting. Meanwhile, the second hypothesis shows that administration, documentation, and operating standard procedures have a significant influence on the implementation of internal examinations. However, the assessment list does not show a significant effect on internal examinations.

Conclusion

The conclusions of this study are as follows: (1) Internal inspection affects the effectiveness of credit control control at PT. BPR Mitradana Madani. (2) Administration, documentation, and standard operating procedures together have an influence on the implementation of internal examinations.

The Importance of Internal Examination

The importance of internal examination not only lies in compliance with existing procedures, but also on its influence on the quality and speed of the credit provision process. With an effective internal examination, banks can prevent high-risk lending and increase customer confidence. This has a positive impact not only for the bank itself but also for people who depend on credit accessibility.

Factors Influencing Internal Examinations

Factors that influence internal examinations, such as administration and documentation, must receive more attention so that operational procedures can run well. Banks need to ensure that all employees understand and apply established standards to improve the quality of internal checks.

Recommendations

Based on the findings of this study, the following recommendations are made:

• PT. BPR Mitradana Madani needs to continue to improve the practice of existing internal examinations in order to achieve their main goals in providing the best service to the community.
• Innovation and renewal in the procedure is also needed to follow the increasingly competitive development of the banking industry.
• Administration, documentation, and standard operating procedures must be given more attention to ensure that operational procedures can run well.
• All employees must understand and apply established standards to improve the quality of internal checks.

Limitations of the Study

This study has several limitations. Firstly, the sample size is relatively small, which may limit the generalizability of the findings. Secondly, the study only focuses on PT. BPR Mitradana Madani and may not be applicable to other banks. Finally, the study only examines the effect of internal examination on the effectiveness of credit control provision and may not consider other factors that may influence the credit control provision process.

Future Research Directions

Future research can build on the findings of this study by examining the following:

• The effect of internal examination on the effectiveness of credit control provision in other banks.
• The factors that influence internal examinations in other banks.
• The impact of internal examination on customer satisfaction and loyalty.
• The role of technology in improving the internal examination process.

Conclusion

In conclusion, this study has shown that internal examination has a significant effect on the effectiveness of credit control provision at PT. BPR Mitradana Madani. The study also highlights the importance of administration, documentation, and standard operating procedures in influencing internal examinations. The findings of this study have implications for PT. BPR Mitradana Madani and other banks in improving their credit control provision process.

Q: What is the purpose of internal examination in credit control provision?

A: The purpose of internal examination in credit control provision is to ensure that the bank's credit control processes are effective and efficient. It involves reviewing and evaluating the bank's credit control procedures to identify areas for improvement and to ensure compliance with regulatory requirements.

Q: How does internal examination affect the effectiveness of credit control provision?

A: Internal examination has a significant effect on the effectiveness of credit control provision. It helps to identify and mitigate risks associated with credit granting, ensures compliance with regulatory requirements, and improves the overall quality of credit control processes.

Q: What are the factors that influence internal examinations?

A: The factors that influence internal examinations include administration, documentation, and standard operating procedures. These factors are critical in ensuring that internal examinations are effective and efficient.

Q: How can banks improve their internal examination processes?

A: Banks can improve their internal examination processes by ensuring that all employees understand and apply established standards, providing regular training and development opportunities, and implementing effective quality control measures.

Q: What are the benefits of effective internal examination in credit control provision?

A: The benefits of effective internal examination in credit control provision include improved credit quality, reduced risk of credit default, increased customer confidence, and improved regulatory compliance.

Q: How can banks measure the effectiveness of their internal examination processes?

A: Banks can measure the effectiveness of their internal examination processes by using metrics such as the number of credit applications reviewed, the number of credit approvals, and the number of credit defaults.

Q: What are the challenges associated with internal examination in credit control provision?

A: The challenges associated with internal examination in credit control provision include ensuring that all employees understand and apply established standards, managing the volume of credit applications, and maintaining effective quality control measures.

Q: How can banks address the challenges associated with internal examination in credit control provision?

A: Banks can address the challenges associated with internal examination in credit control provision by providing regular training and development opportunities, implementing effective quality control measures, and ensuring that all employees understand and apply established standards.

Q: What is the role of technology in improving internal examination processes?

A: Technology can play a critical role in improving internal examination processes by providing tools and systems that support effective credit control processes, such as credit scoring models, credit risk assessment tools, and workflow management systems.

Q: How can banks leverage technology to improve their internal examination processes?

A: Banks can leverage technology to improve their internal examination processes by implementing credit scoring models, credit risk assessment tools, and workflow management systems, and by providing regular training and development opportunities to ensure that all employees understand and apply established standards.

Q: What are the implications of this study for PT. BPR Mitradana Madani and other banks?

A: The implications of this study for PT. BPR Mitradana Madani and other banks are that they should prioritize internal examination as a critical component of their credit control provision processes, and that they should ensure that all employees understand and apply established standards to improve the quality of internal checks.

Q: What are the limitations of this study?

A: The limitations of this study include the relatively small sample size, the focus on PT. BPR Mitradana Madani, and the examination of only the effect of internal examination on the effectiveness of credit control provision.

Q: What are the future research directions for this study?

A: Future research directions for this study include examining the effect of internal examination on the effectiveness of credit control provision in other banks, examining the factors that influence internal examinations in other banks, and examining the impact of internal examination on customer satisfaction and loyalty.