OJK Says Credit Interest Can Drop If Banks Have Sufficient Debtor Information

Illustration of OJK (Photo: Doc. Antara)

JAKARTA - The Financial Services Authority (OJK) stated that credit interest could decrease. This happens if banks or financing institutions have sufficient information related to prospective debtors.

Deputy Chairman of the OJK Board of Commissioners Mirza Adityaswara said that if banks or financing institutions do not have enough information from debtors, the credit interest is estimated to be high as a form of credit risk mitigation.

"If the bank or information financing institution is not enough, what does it do? Given high interest rates," he said, quoting Antara, Friday, March 17.

However, he did not mention a high interest limit or a decrease in credit interest related to the adequacy of debtor information.

Currently, credit information from prospective debtors is collected in the Financial Information Service System (SLIK) in the OJK or previously known as BI-Checking which is owned at Bank Indonesia (BI).

Credit information on SLIK, he said, includes information from banks and financing institutions.

In addition, there is also a credit assessment service by two types of entities, namely the Credit Information Management Institution (LPIP) as the Conventional Credit Bureau, and a digital-based Innovative Credit Assessment (ICS) provider.

Conventional Credit Bureau provides credit reports and assessments based on traditional credit data, such as a history of repayment of loans and debts that have not been paid off.

Meanwhile, ICS is a newer form of assessment that uses alternative data sources to assess credit eligibility.

New sources of credit assessment include the activities of prospective debtors on social media, online transactions and the use of cell phones.

ICS, he said, is mostly used by financial technology-based financing institutions (fintech), including applications that bring together borrowers with lenders or peer to peer (P2P) lending.

Mirza hopes that both credit bureaus and credit assessments with digital-based systems can collaborate to support and grow healthy credit because credit realization in the country has only reached around 35 percent of Indonesia's Gross Domestic Product (GDP).

This achievement, he said, was still much lower than Thailand, which had reached around 70 percent of GDP.

For this reason, he assessed that there is still a lot of room that financial service institutions can develop for greater credit penetration.

Based on OJK data, the realization of bank credit in the country in December 2022 reached IDR 6,424 trillion or an 11.35 percent jump compared to the same period in 2021 which reached IDR 5,482 trillion.

The achievement of credit realization in 2022 is estimated to be around 35 percent of the total GDP at current prices of Rp. 19,588.4 trillion, based on data from the Central Statistics Agency (BPS) in 2022.