BRI Says MSME Credit Quality Continues To Improve Post-pandemic

Illustration (Photo: Doc. Antara)

JAKARTA PT Bank Rakyat Indonesia Tbk. (BRI) stated that the quality of lending for the micro, small and medium enterprises (MSMEs) segment continues to improve after the pandemic. BRI Risk Management Director Agus Sudiarto said this was supported by the economic condition of Indonesia which continues to recover.

"This stable economic condition is felt by MSME actors. People's purchasing power is improving, MSMEs are recovering. Of course, it has an impact on credit quality," he said in a written statement, Sunday, September 24.

According to Agus, BRI's ability to distribute credit can also be balanced by efforts to maintain the quality of credit distributed. He noted, until the end of June 2023 the non-performing loan (NPL) ratio fell 31 basis points (bps) from 3.26 percent in June 2022 to 2.95 percent.

Positive signals show that the company can manage MSME portfolios well. Because it is still below 3 percent. Even under 5 percent is quite good in our opinion, for banks whose focus is on MSMEs," he said.

On the same occasion, Director of the Center of Economic and Law Studies (Celios) Bhima Yudhistira revealed that the risk profile of MSME credit in Indonesia continues to show encouraging results.

"The quality of MSME loans has indeed improved because some of the restructuring has been completed and banks are doing a written-off through backup," he said.

For information, BRI reported lending of IDR 1,202.1 trillion, up 8.8 percent year on year (yoy) in the first semester of 2023. Most of the financing flows to MSME actors.

Meanwhile, the MSME segment contributed Rp1,015.5 trillion from the total credit of the issuer codenamed BBRI. In more detail, the micro segment contributed the most to MSME loans, namely 48.1 percent or Rp577.94 trillion.

Meanwhile, OJK reported that the improving quality of MSME loans can be seen from the average NPL dropping to the level of 3.7 percent.