The Financial Services Authority (OJK) decided to extend the credit restructuring program affected by Covid-19 which will end in March 2023. However, the relaxation extension from the regulator is only segmented and sectoral. Chairman of the OJK Board of Commissioners Mahendra Siregar said the reason for the regulator issuing this policy was after conducting an in-depth study of the progress of the restructuring process and looking at the conditions of the credits being restructured for the past two years. From there, it can be seen that there are certain sectors and industries that are still experiencing scaring effects.
"When other sectors have recovered, it is shown from the restructuring value that has been much reduced. Likewise, those who have recovered have shown clear growth. However, there are certain sectors and industries that still need additional processing and time," said Mahendra at the House of Representatives (DPR) Complex on Monday (28/11).
He continued, the extension of the restructuring must be given to the MSME segment in all sectors, the accommodation and food and beverage provider sector. Likewise, several industries that provide large employment opportunities, such as the textile and textile product (TPT) industry and the footwear industry.
"There are two aspects, first, the amount of credit being restructured is still high. Second, in terms of the growth rate of recovery, it is not as fast as the others," said Mahendra.
Director of Public Relations of OJK Darmansyah said, OJK adopts a policy of supporting certain (targeted) segments, sectors, industries and regions that require a one-year additional credit/financing restructuring period until March 31, 2024. Covering, first is the MSME segment which covers all sectors. Second, the accommodation and food supply sector.
"The three industries that provide large employment opportunities are the textile and textile product (TPT) industry and the footwear industry. This policy is carried out in an integrated manner and applies to banks and finance companies," he said in an official statement on Monday (28/11).
The existing and comprehensive credit/financing restructuring policy in the context of the Covid-19 pandemic is still valid until March 2023. Financial Services Institutions (LJK) and business actors who still need this policy, can use the said policy until March 2023 and will remain in effect until with the end of the credit/financing agreement between the LJK and the debtor.
He said the OJK would continue to pay close attention to developments in the global economy and its impact on the national economy, including the intermediation function and financial system stability.
In this regard, OJK continues to request that FSI prepare adequate buffers to mitigate risks that may arise. OJK will also respond proportionately to further developments while prioritizing financial system stability and maintaining the momentum of national economic recovery.
The basis for this policy is because the OJK considers that currently global economic uncertainty remains high, mainly due to the normalization of global economic policies by the US Central Bank (the Fed), uncertain geopolitical conditions, and high inflation rates. The slowdown in world economic growth in the future is inevitable, as predicted by various international institutions.
"On the other hand, the recovery of the national economy continues in line with the more controlled pandemic and the normalization of people's economic activities. Most of Indonesia's sectors and industries have returned to strong growth. However, based on in-depth analysis several exceptions were found due to the prolonged impact of the Covid-19 pandemic (scarring effects)," he concluded.
