: 10.56472/25835238/IRJEMS-V5I9P108
Putri Indah Permatasari "Bridging Regulation and Internal Capability: The Mediating Role of the Loan Management System in Enhancing Banking Business Performance in West Java" International Research Journal of Economics and Management Studies, Vol. 5, No. 9, pp. 84-95, 2026. Crossref. https://doi.org/10.56472/25835238/IRJEMS-V5I9P108
This study aims to analyze the effects of the regulatory environment and the internal environment on business performance, both directly and indirectly through the Loan Management System (LMS) as a mediating variable, at BJB Bank Branch Offices in West Java Province. The study employed a quantitative approach with an explanatory research design. The population, which also constituted the research sample, consisted of 45 active Branch Office Heads with experience in business functions, lending, operations, risk management, compliance, internal control, and LMS implementation. Data were collected through a Likert-scale questionnaire and analysed using Partial Least Squares–Structural Equation Modeling (PLS-SEM). The results indicate that the regulatory environment does not have a statistically significant direct effect on business performance, whereas the internal environment has a positive and significant effect on business performance. Both the regulatory environment and the internal environment have positive and significant effects on the LMS, while the LMS exerts the strongest positive and significant effect on business performance. The LMS is also proven to significantly mediate the effects of both the regulatory environment and the internal environment on business performance. These findings confirm that improving business performance depends not only on regulatory requirements and internal capabilities, but more importantly on the bank’s ability to translate both into effective, integrated, and well-controlled practices through the LMS. The novelty of this study lies in positioning the LMS as a specific mediating mechanism in credit management at the branch-office level.
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Regulatory Environment, Internal Environment, Loan Management System, Business Performance.