UNS – The Financial Service Authority (Otoritas Jasa Keuangan-OJK) issued an OJK Regulation (POJK) No.11/POJK.03/2020 regarding the National Economic Stimulus as Countercyclical Policy on the Impact of Coronavirus Disease (COVID-19) Spread. In the POJK, the Indonesia Government through OJK provides relief for credit installment payment for businesses affected by the pandemic COVID-19. As quoted from the CNBC Indonesia, OJK spokesperson, Sekar Putih Djarot said that there are several requirements that should be fulfilled by the debtors to get the installment relief.
Firstly, the debtor is affected by COVID-19 with credit value/leasing under 10 billion rupiah, such as informal workers, have a daily income, micro and small enterprises (UMKM Credit and KUR). Second, the relief is given for the maximum period of 1 year in the form of principal/interest installment adjustment, period extension, or other forms as determined by banks/leasing. Further, the third requirement is debtor must personally apply for the relief through the official communication network of the banks/leasing. Finally, the fourth is data validation from the Board of Directors if the application is made collectively or through a third-party company.
Then, what is the response from the Universitas Sebelas Maret (UNS) Surakarta observer’s in finance and banking related to the OJK regulation? Irwan Trinugroho, Ph.D., who is an observer in finance and banking UNS welcomed the POJK as an effort to anticipating sluggish Indonesia’s economy due to COVID-19.
“The initiative was taken by OJK through this POJK No. 11/POJK.03/2020 is one of the countercyclical policies from the government for the economic stimulus when the economic activities are decreased due to the COVID-19 outbreak. During this period, various stimuli are needed either fiscal, monetary, and sectoral stimulus,” said Irwan.
Irwan underlined that the credit relaxation policy from OJK is one of the nine economy policies issued by the government to anticipate the economic impact of COVID-19 as President Joko Widodo has said on (26/3/2020).
To uns.ac.id, Irwan said that intervention policy is indispensable in order to provide a stimulus in the form of credit/financing restructuring.
“I think this policy is fine. There are many affected MSMEs due to COVID-19, therefore, regulatory intervention is needed, one of them is in the form of this credit restructuring. For example, an event organizer business has a credit in a bank. During the current condition, their revenue clearly dropped drastically due to the COVID-19 outbreak. In the end, it will burden them to pay the installment, thus, this credit restructuring can help them,” Irwan continued.
Even though he welcomes the OJK policy, Irwan sees that the government still needs to provide other assistance to COVID-19 affected entrepreneurs. “As for OJK, their authority is related to the intervention on credit relaxation policy. Other stimuli that can be offered by the government to assist MSME, for instance, are the relaxation on electricity and water bill payment, or taxes relaxation, however, this (policy) is not under OJK authority,” Irwan added.
Furthermore, Irwan also gives some inputs, both for the government, banking sector, as well as financial institution, thus the installment payment relief can precisely reach the target and is ready to implement the POJK. “Risk management system, assets management, and measured liquidity to implement this policy. Bank and the financial company will conduct an assessment on each restructuring application, especially regarding the profile and debtor repayment capacity. This is a mechanism to prevent the occurrence of potential moral hazard,” said Irwan.
When asked regarding the stability of the Indonesian economy until the mid of 2021, Irwan answers that the economic condition in Indonesia will be determined from how quickly the COVID-19 pandemic ends. “What certain is, this depends on how fast the COVID-19 problem will end, the faster the better, thus, the earlier is the economic recovery process started. Let’s pray that this COVID-19 outbreak will end soon, thus, our economy can recover immediately,” Irwan concluded. Humas UNS/Yefta