Airlangga Review Credit Restructuring Extension Options For KUR

Coordinating Minister for the Economy Airlangga Hartarto (Photo: Antara)

Coordinating Minister for Economic Affairs Airlangga Hartarto reviewed the option of extending credit restructuring affected by COVID-19 only for People's Business Credit (KUR).

He assessed that the lower middle class groups needed more extension of the credit restructuring.

"We are currently reviewing this in the KUR policy. At first we created a middle class, but it looks like a lower middle class," said Airlangga quoting Antara.

According to Airlangga, the banking sector is currently still able to survive if it faces the possibility of the restructuring of the credit policy.

"This banking feels that there are quite a resilience so of course we will look at the (credit restructuring) KUR specifically," he said.

He made the insurance sector one of the indicators. If there is an increase in credit insurance, then this is an indicator of increasing credit risk.

"Yes, we will look at it from the KUR side because there is a request from insurance to increase the number of reserves," explained Airlangga.

However, the final decision to extend credit restructuring affected by COVID-19 has yet to be decided. Airlangga assessed that further assessment was still needed.

Chairman of the Board of Commissioners of the Financial Services Authority (OJK) Mahendra Siregar previously stated that he would investigate the direction of President Joko Widodo (Jokowi) regarding the extension of the COVID-19 credit restructuring stimulus policy until 2025.

"We will explore, conduct an evaluation, both related to what was completed last March and to the potential limitation of credit growth in certain segments," Mahendra said when met after the Mother's Financial Education talks event by OJK in Jakarta, Tuesday (25/6).

The COVID-19 credit restructuring policy has been in effect since March 2020 and ends on March 31, 2024.

Mahendra said the OJK had considered various aspects when deciding to end the policy, such as impact, capital adequacy, backup or reserve value reduction losses (CKPN), liquidity and capacity for credit growth.

In addition, OJK saw credit growth this year improve when compared to last year's performance.

"So, from that point of view, actually what happened at the end of March or after, nothing was an anomaly. But, on the other hand, we understand that there is special attention to the potential for credit growth in certain segments," he said.