Troubled Credit Analysis Due To Coronavirus Disease 2019 And The Efforts Of PT. Mitradana Madani People's Credit Bank To Overcome It

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Troubled Credit Analysis Due to Coronavirus Disease 2019 and the Efforts of PT. Mitradana Madani People's Credit Bank to Overcome it

Introduction

The Coronavirus Disease 2019 (Covid-19) pandemic has had a significant impact on various sectors, including the banking sector. PT. Mitradana Madani People's Credit Bank (BPR), a rural credit bank, has analyzed the impact of the Covid-19 pandemic on its customers, resulting in problem loans. This study aims to identify non-performance loans (NPLs) that occur and explain the steps taken by banks to overcome this problem and reduce problem loans in the future.

Background

The Covid-19 pandemic has caused a significant decline in economic activity, leading to a rise in problem loans among banks. PT. BPR Mitradana Madani has been affected by this trend, with a significant number of its customers experiencing financial difficulties. The bank has taken steps to address this issue, including conducting a comprehensive evaluation of its debtor profiles and financial conditions.

Methodology

This study was conducted using a qualitative data analysis method, with validation using triangulation techniques. The data was collected from 47 debtors who had substandard loan collectibility, doubtful, and traffic jams during the month period from December 2019 to August 2020. The informants involved in this study were one head of credit, one head of operational section, and one director of PT. BPR Mitradana Madani.

Results

The results of this study showed that although Covid-19 has the potential to increase the risk of problem loans, this factor does not necessarily cause a direct decline in credit collectibility. This is due to the policies issued by the government through the Financial Services Authority Regulation (POJK) Number 11/POJK.03/2020 on March 16, 2020, which aims to provide a stimulus to the national economy and prevent more severe negative impacts due to the pandemic.

However, over time, the negative impact of the Covid-19 pandemic began to appear clearly, mainly due to termination of employment (PHK) and decreased business revenue in various affected sectors. The analysis conducted showed that there were several steps taken by PT. BPR Mitradana Madani to overcome problem loans.

Efforts to Overcome Problem Loans

  1. Comprehensive Evaluation of Debtor Profiles and Financial Conditions: PT. BPR Mitradana Madani conducts a comprehensive evaluation of its debtor profiles and financial conditions. By understanding the situation of each debtor, banks can offer more precise and personal solutions, such as credit restructuring or payment rescheduling.
  2. Increased Communication and Proactive Approaches: Banks also increase communication and proactive approaches to debtors. In difficult situations like this, understanding and support from the bank becomes very important. PT. BPR Mitradana Madani seeks to establish good and transparent relationships with debtors, so they feel supported and not depressed.
  3. Innovative Solutions to Minimize the Risk of Problem Loans: PT. BPR Mitradana Madani is active in finding innovative solutions to minimize the risk of problem loans. They involve technology and information systems in credit management, which allows banks to monitor the state of the debtor in real-time and detect potential problems earlier.
  4. Partnerships with Related Institutions: PT. BPR Mitradana Madani established partnerships with related institutions to get training and development for their debtors. By providing training on financial management and business strategies, it is hoped that the debtor can improve their ability to manage businesses and finances, so as to prevent problem loans in the future.

Conclusion

In conclusion, despite the impact of the Pandemi Covid-19 on problem loans at PT. BPR Mitradana Madani has been seen, the efforts made by the bank showed responsiveness in facing challenges. The steps taken not only focused on recovery of non-performing loans, but also preparing debtors to face future economic challenges. This indicates that collaboration between banks and debtors is very important in overcoming credit problems in this era full of uncertainty.

Recommendations

Based on the findings of this study, the following recommendations are made:

  1. Banks should conduct regular evaluations of their debtor profiles and financial conditions to identify potential problems and offer more precise and personal solutions.
  2. Banks should increase communication and proactive approaches to debtors to establish good and transparent relationships with debtors.
  3. Banks should involve technology and information systems in credit management to monitor the state of the debtor in real-time and detect potential problems earlier.
  4. Banks should establish partnerships with related institutions to get training and development for their debtors.

By implementing these recommendations, banks can reduce the risk of problem loans and improve the overall performance of their credit portfolios.
Troubled Credit Analysis Due to Coronavirus Disease 2019 and the Efforts of PT. Mitradana Madani People's Credit Bank to Overcome it

Q&A

Q: What is the impact of the Covid-19 pandemic on the banking sector?

A: The Covid-19 pandemic has had a significant impact on the banking sector, leading to a rise in problem loans among banks. This is due to the decline in economic activity, resulting in a decrease in business revenue and employment opportunities.

Q: How did PT. BPR Mitradana Madani respond to the impact of the Covid-19 pandemic?

A: PT. BPR Mitradana Madani conducted a comprehensive evaluation of its debtor profiles and financial conditions to identify potential problems and offer more precise and personal solutions. They also increased communication and proactive approaches to debtors, established partnerships with related institutions, and involved technology and information systems in credit management.

Q: What are some of the steps taken by PT. BPR Mitradana Madani to overcome problem loans?

A: Some of the steps taken by PT. BPR Mitradana Madani include:

  1. Comprehensive evaluation of debtor profiles and financial conditions: PT. BPR Mitradana Madani conducts a comprehensive evaluation of its debtor profiles and financial conditions to identify potential problems and offer more precise and personal solutions.
  2. Increased communication and proactive approaches: PT. BPR Mitradana Madani increased communication and proactive approaches to debtors to establish good and transparent relationships with debtors.
  3. Innovative solutions to minimize the risk of problem loans: PT. BPR Mitradana Madani is active in finding innovative solutions to minimize the risk of problem loans, such as involving technology and information systems in credit management.
  4. Partnerships with related institutions: PT. BPR Mitradana Madani established partnerships with related institutions to get training and development for their debtors.

Q: What is the importance of collaboration between banks and debtors in overcoming credit problems?

A: Collaboration between banks and debtors is very important in overcoming credit problems in this era full of uncertainty. By working together, banks and debtors can identify potential problems and offer more precise and personal solutions, reducing the risk of problem loans and improving the overall performance of credit portfolios.

Q: What are some of the recommendations for banks to reduce the risk of problem loans?

A: Some of the recommendations for banks to reduce the risk of problem loans include:

  1. Conduct regular evaluations of debtor profiles and financial conditions: Banks should conduct regular evaluations of their debtor profiles and financial conditions to identify potential problems and offer more precise and personal solutions.
  2. Increase communication and proactive approaches to debtors: Banks should increase communication and proactive approaches to debtors to establish good and transparent relationships with debtors.
  3. Involve technology and information systems in credit management: Banks should involve technology and information systems in credit management to monitor the state of the debtor in real-time and detect potential problems earlier.
  4. Establish partnerships with related institutions: Banks should establish partnerships with related institutions to get training and development for their debtors.

Q: What is the future outlook for the banking sector in the wake of the Covid-19 pandemic?

A: The future outlook for the banking sector in the wake of the Covid-19 pandemic is uncertain. However, by implementing the recommendations outlined in this study, banks can reduce the risk of problem loans and improve the overall performance of their credit portfolios.