Rabu 17 Apr 2024 15:20 WIB

Covid-19 Credit Restructuring Ends, BRI Responds Positively

BRI welcomed this decision.

Direktur Utama BRI Sunarso.
Foto: BRI
Direktur Utama BRI Sunarso.

REPUBLIKA.CO.ID, JAKARTA -- Bank Rakyat Indonesia (BRI) welcomes the decision of the Financial Services Authority (OJK) to end the credit restructuring stimulus policy for debtors affected by Covid-19 at the end of March 2024.

The President Director of BRI, who is also the Chair of the Association of State-Owned Banks (Himbara), Sunarso, said that this policy has proven to be able to save the majority of MSME businesses during the Covid-19 pandemic which began to spread in Indonesia in 2020. The company revealed that BRI internally no longer uses the policy since 2023 as an effort to implement prudential banking.

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"BRI has also implemented anticipatory steps to respond to the end of the Covid restructuring relaxation in March 2024, where BRI has prepared a soft landing strategy. We are optimistic that the end of this relaxation will not have a significant impact on BRI's credit quality performance or financial performance in general," said Sunarso, Monday (1/4/2024).

To anticipate risks, BRI also continues to balance it by making adequate reserves. Until the end of December 2022, BRI's NPL Coverage was recorded at the level of 305.73 percent. These reserves are used to write off MSME loans that truly cannot be restructured any longer. So, in December 2023, NPL Coverage will fall to the level of 229.09 percent but the reserves are still very adequate if a deterioration occurs.

Previously, in mid-February 2024, BRI President Director Sunarso revealed that the company had recorded a decline in the value of loans affected by Covid-19 which were restructured, where the outstanding Covid-19 restructuring credit as of December 2023 fell to IDR 54.5 trillion from IDR 107.2 trillion in the period the same as the previous year.

"If calculated from the peak, Rp. 210 trillion has already left restructuring status so that now the outstanding is only Rp. 54 trillion," said Sunarso.

Sunarso also said that since the start of the pandemic, BRI has taken strategic steps to rescue Micro, Small and Medium Enterprises (MSMEs) which have a crucial role in the Indonesian economy. It is recorded that MSMEs contribute 60.3 percent of Indonesia's total gross domestic product (GDP).

Apart from that, MSMEs absorb 97 percent of the workforce and provide 99 percent of employment opportunities in Indonesia. However, the Covid-19 pandemic has put heavy pressure on MSMEs, because they cannot carry out economic activities as usual.

"BRI's focus on empowering and stimulating the activities of Micro, Small and Medium Enterprises (MSMEs) during the pandemic also became the driving force for BRI's financial performance at that time," said Sunarso.

It is known that during the four years of implementation, the use of this credit restructuring stimulus has reached IDR 830.2 trillion given to 6.68 million debtors in October 2020, which is the highest figure in Indonesian history. As many as 75 percent of the total debtors receiving the stimulus are the MSME segment or 4.96 million debtors with a total outstanding of IDR 348.8 trillion.

In line with the ongoing economic recovery, the restructuring credit trend continues to decline both in terms of outstanding and number of debtors. In January 2024, outstanding Covid-19 restructuring credit had decreased significantly to IDR 251.2 trillion given to 977 thousand debtors.


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