Mapping of Efficiency and Profitability in Islamic Rural Bank in Indonesia

Currently, many Islamic Rural Banks (BPRS) are operating in the areas of Regency, where level of competitive among Islamic Rural Banks is also increasing dramatically. These require Islamic Rural Banks (BPRS) to manage funds efficiently in ways optimal profitability. This study tried to analyze the matrix of efficiency and profitability on Islamic Rural Banks (BPRS) in Indonesia, and also to analyze the factors that affect the efficiency of the Islamic Rural Banks (BPRS).The matrix of efficiency and profitability is computed through three models, namely the model of CRS, VRS and scale models. Results of the study show that the matrix of efficiency and profitability in all three models are a model of efficiency levels CRS, VRS, and scale in 2012 and 2011 which is showed that the results are not much different. The number of Islamic Rural Banks (BPRS) is the most in a group of dog, namely, Islamic Rural Banks (BPRS) with a high level of efficiency but low levels of profitability.


INTRODUCTION Background
Bank as a business entity certainly have purpose to get profit for all parties (profit oriented).Profits that generated in the banks not only an attraction for people to invest their funds in the bank but also that profits indicated that banks are in good shape, including the characteristics of soundness of banks.
To assess whether a banks including a bank category of soundness or not, it will be seen from its operational performance.Performance can be measured by looking at the efficiency of the bank's fund management.For it with the more efficient a bank then it will indicate the level of bank soundness.Muliaman (2003) suggested that efficiency is one of the performance parameters which theoretically are one of the underlying entirely performance of an organization.Ability to produce maximum output with aught input is a measurement of expected performance.At the time that efficiency measurements performed, banks are faced with the conditions of how to obtain the optimal level of output with the aught input level, or get the minimum input level to the level of output.
In addition, the level of profitability of banks also indicated the bank's performance.The higher level of profitability, the bank has a good performance and indicated including soundness of banks.
Islamic banks are currently being discussed, constantly increasing both in an increasing number of Islamic banks and Islamic banks assets level which continues to grow.Until the first quarter of 2013 Islamic banking has assets of roughly Rp 200 billion, or 4.5 percent of the total national banking assets (market share).
In studies that have been done, has been much research on the performance of Islamic banks, especially Islamic Commercial Banks (BUS) and Islamic Business Unit Condensed (UUS) thoroughly.However, it is still rare that examine the performance of Islamic Rural Banks (BPRS) thoroughly.
Therefore, in this study, it will be analyzed at the level of efficiency and profitability of Islamic Rural Banks (BPRS) and to simulate matrix of combination between efficiency and profitability levels.

Problem Formulation
To avoid misunderstanding of the problem to be written and focus the issues to be studied in order to obtain optimal results, it is necessary to provide a formulation of the problem of the object under study.The formulation as follows: 1.Which Sharia Rural Banks (BPRS) that includes a group with low productivity levels and includes a groups with high productivity levels in 2011 and 2012.2. Which Sharia Rural Banks (BPRS) that includes a group with a low level of efficiency and includes a group with high efficiency in 2011 and 2012 based on the model of CRS.According to Ghazali (2010: 23) profitability ratios measure the effectiveness of management based on returns generated from loans and investments.Indicators used to measure the performance of bank profitability is ROE (Return on Equity) is the ratio that describes the amount of the return on total capital to generate profits, ROA (Return on Assets) is the ratio shows that the overall ability of existing assets and used to produce advantage.

Efficiency
Efficiency is one of the performance parameters which theoretically is one of the underlying performance of the entire performance of an organization.The ability to produce a maximum output with current input is a measure of the expected performance (Edy, 2009).
Ibn ( 2004) stated that the efficiency can be evaluated from two aspects.Firstly, in terms of results (output) is the desired minimum outcome pre-determined.Then also set the maximum sacrifice.This is the normal sacrifice limit.If sacrifice less than specified, it includes efficient.Secondly, in terms of sacrifice (input) is to sacrifice (input) the existing or set, the minimum result should be achievable.If the results achieved under the minimum outcomes, so it works in-efficiently.
The efficiency of the bank is one of the important indicators to analyze the performance of a bank and also as a means to further enhance the effectiveness of monetary policy.Efficiency can be viewed from two sides, i.e. in terms of cost (cost efficiency) and profit (profit efficiency The measurement of the level of efficiency with scale models can be calculated using the ratio between the overall technical efficiency and pure technical efficiency.Namely the ratio between technical efficiency CRS (Constant Returns to Scale) with technical efficiency VRS (Variable Returns to Scale).

Research Hypothesis
Hypothesis is used to analyze the determination of efficiency level of Sharia Rural Banks (BPRS).The goal is to determine the significance of the factors which most influence on the efficiency of the Sharia Rural Banks (BPRS), the hypotheses as follow: H o = There is no influence of independent variables on the level of efficiency in the Sharia Rural Banks (BPRS).H a = There is influence of independent variables on the level of efficiency in the Sharia Rural Banks (BPRS).In VRS models, Sharia Rural Banks (BPRS) also grouped into two types based on the level of efficiency that is obtained, namely, Sharia Rural Banks (BPRS) with high levels of efficiency and Sharia Rural Banks (BPRS) with low levels of efficiency.

RESEARCH METHOD Sources and Data Collection Technique
4. The efficiency level of Sharia Rural Banks (BPRS) by Scale Model Scale models calculated using the ratio between the overall technical efficiency and pure technical efficiency.Namely, the ratio between technical efficiency CRS (Constant Returns to Scale) with technical efficiency VRS (Variable Returns to Scale).In scale models, Sharia Rural Banks (BPRS) also grouped into two types based on the level of efficiency that is obtained namely Sharia Rural Banks (BPRS) with high levels of efficiency and Sharia Rural Banks (BPRS) with low levels of efficiency.

RESULTS AND DISCUSSION
Analysis of Profitability of Sharia Rural Banks (BPRS) Sharia Rural Banks (BPRS) are grouped according to the two groups with a level of profitability namely Sharia Rural Banks (BPRS) with high level of profitability and Sharia Rural Banks (BPRS) with low level of profitability (ROA).Criteria for high or low level of profitability is based on the median or midpoint of the data overall profitability of Sharia Rural Banks (BPRS), as a reference in the study of Abu-Alkheil, Burghof, and Khan (2012).Sharia Rural Banks (BPRS) have a higher level of profitability or equal to the median is Sharia Rural Banks (BPRS) with a high level of profitability.While Sharia Rural Banks (BPRS) with the level of profitability is lower than the median BPRS is a low level of profitability.

Analysis of Efficiency Level at Sharia Rural Banks (BPRS) Based on CRS Model
Sharia Rural Banks (BPRS) also grouped into two types based on the level of efficiency that is obtained namely Sharia Rural Banks (BPRS) with high levels of efficiency and Sharia Rural Banks (BPRS) with low levels of efficiency.
Criteria for high or low level of efficiency is based on the median or midpoint of the data overall efficiency of Sharia Rural Banks (BPRS), as a reference in the study of Abu-Alkheil, Burghof, and Khan (2012).Sharia Rural Banks (BPRS) have a higher level of efficiency or equal to the median is Sharia Rural Banks (BPRS) with a high level of efficiency.While Sharia Rural Banks (BPRS) with the level of efficiency is lower than the median BPRS is a low level of efficiency.

Analysis of Efficiency Level at Sharia Rural Banks (BPRS) Based on VRS Model
In VRS model, Sharia Rural Banks (BPRS) also grouped into two types based on the level of efficiency that is obtained namely Sharia Rural Banks (BPRS) with high levels of efficiency and Sharia Rural Banks (BPRS) with low levels of efficiency.
Criteria for high or low level of efficiency is based on the median or midpoint of the data overall efficiency of Sharia Rural Banks (BPRS), as in the study of Abu-Alkheil, Burghof, and Khan (2012).Sharia Rural Banks (BPRS) have a higher level of efficiency or equal to the median is Sharia Rural Banks (BPRS) with a high level of efficiency.While Sharia Rural Banks (BPRS) with the level of efficiency is lower than the median BPRS is a low level of efficiency.

Analysis of Efficiency Level at Sharia Rural Banks (BPRS) Based on Scale Model
In Scale model, Sharia Rural Banks (BPRS) also grouped into two types based on the level of efficiency that is obtained namely Sharia Rural Banks (BPRS) with high levels of efficiency and Sharia Rural Banks (BPRS) with low levels of efficiency.
Criteria for high or low level of efficiency is based on the median or midpoint of the data overall efficiency of Sharia Rural Banks (BPRS), as in the study of Abu-Alkheil, Burghof, and Khan (2012).Sharia Rural Banks (BPRS) have a higher level of efficiency or equal to the median is Sharia Rural Banks (BPRS) with a high level of efficiency.While Sharia Rural Banks (BPRS) with the level of efficiency is lower than the median BPRS is a low level of efficiency.
3. How efficiency-profitability matrix analysis in 2011 and 2012 based on the model of CRS. 4. Which Sharia Rural Banks (BPRS) that includes a group with a low level of efficiency and includes a group with high efficiency in 2011 and 2012 based on the model of VRS. 5. How efficiency-profitability matrix analysis in 2011 and 2012 based on the model of VRS. 6.Which Sharia Rural Banks (BPRS) that includes a group with a low level of efficiency and includes a group with high efficiency in 2011 and 2012 based on Scale model.7. How efficiency-profitability matrix analysis in 2011 and 2012 based on Scale model.8. What factors that affect the level of efficiency of Sharia Rural Banks (BPRS) based model of VRS in 2012.
Profitability by Sastradipoera (2001)is the amount remaining after fixed costs and variable costs are deducted from the proceeds of a bank or excess income(income) over expenditure (expenditure) bank.WhileHadad et al (2003: 1)defines profitability as the basis of the relationship between operational efficiency with quality of services produced by a bank.
).Profit efficiency itself is divided into 2 parts that are Standard Alternative profit efficiency and profit efficiency(Suswadi, 2007).
Sampling technique in this study is purposive sampling with criteria of Islamic Rural Banks (BPRS) that monthly financial reports are available in full during the period January 2011 2. The efficiency level of Sharia Rural Banks (BPRS) by Model CRS Measuring the level of efficiency using a model CRS (Constant Returns to Scale) is a measure of overall technical efficiency.The CRS model assumes constant returns to scale and the optimal scale operations.This model is a weighted ratio of output to input.This would indicate that the more output is generated by a particular input, the more efficient a DMU.CRS model to measure the overall technical efficiency (overall technical efficiency) of a DMU.The overall technical efficiency is a combination of technical efficiency and scale efficiency.
Sharia Rural Banks (BPRS) also grouped into two types based on the level of efficiency that is obtained namely the Sharia Rural Banks (BPRS) with a high degree of efficiency and the Sharia Rural Banks (BPRS) with a low level of efficiency.3.The efficiency level ofSharia Rural Banks (BPRS) by Model VRS Measuring the level of efficiency using a model VRS (Variable Returns to Scale) is a measurement of pure technical efficiency.Models VRS or models BCC (Banker, Charnes, and Cooper) made by Banker, Charnes, and Cooper in 1984 and is an improved model of CRS by adding the assumption Variable Returns to Scale.VRS model provides a measurement of pure technical efficiency, i.e. technical efficiency (technical efficiency) without scale efficiency (scale efficiency).

International Journal of Academic Research in Business and Social Sciences
Sources: Secondary data was processed, Central Bank of Indonesia