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COVID-19: Governance (Indonesia): OJK introduces credit stimulus to mitigate pandemic impact

Indonesia’s Financial Services Authority (OJK) has issued credit stimulus policies for Indonesian banks, relaxing credit scoring requirements and providing special treatment for loan restructuring.

The policy is available to commercial banks (and their sharia units), sharia banks, rural credit banks (BPR), sharia rural credit banks (BPRS) and foreign bank branch offices in Indonesia. 

The National Economic Stimulus as Countercyclical Policy for Coronavirus Disease 2019 was issued as OJK Regulation No. 11/POJK.03/2020 dated 16 March 2020, and is valid from 16 March 2020 until 31 March 2021.

All debtors (including micro, small and medium enterprises) of Indonesian banks are eligible for the credit stimulus under the COVID-19 Credit Stimulus Policy as long as, based on the bank’s internal assessment, its debtors or business conditions have been affected by the COVID-19 pandemic. 

OJK requires banks to draw up internal guidelines determining the requirements of debtors affected by COVID-19 “as soon as possible” (no timeline is specified).


The COVID-19 Credit Stimulus Policy provides special treatment for credit scoring related to a bank’s credit asset quality assessment, up to the amount of IDR10 billion (US$600,000 at current exchange rates). 

In normal circumstances, banks are required to assess and score their debtors’ credit based on the following three parameters, per the OJK regulation on assessing asset (including credit) quality: 

    • debtor’s business prospects; 
    • debtor’s working governance; and 
    • debtor’s ability to pay. 

The COVID-19 Credit Stimulus Policy waives the obligation for banks to use a wider spectrum of parameters to assess credit asset quality. OJK now permits banks to assess the credit scores (ie, in order: liquid, special mention, sub-standard, doubtful or loss) for the debtors concerned by looking only at payment punctuality for the principal loan and interest (ie, parameter (iii) above). 

This stimulus applies to bank debtors that have credit ceilings of up to IDR10 billion and have been affected by the COVID-19 pandemic.


Normally, banks are required to apply prudential principles in restructuring debtor loans. If a loan asset is restructured, its credit score will be determined by the relevant OJK regulation. 

That regulation states that the credit score for a restructured loan asset will be the same as if the loan asset had not been restructured. However, the score for the restructured loan asset will go up by one level (eg, from “sub-standard” to “special mention”) if the debtor meets its payment obligations on the principal loan and/or interest for three consecutive payment periods.

The COVID-19 Credit Stimulus Policy allows banks to raise their credit score for restructured loan assets to the highest level (ie, “liquid”) when a loan is restructured without needing to fulfill any of the above conditions. This stimulus applies to all debtors affected by the COVID-19 pandemic, whatever the type or amount of the loan asset. 

The relevant OJK Regulation defines non-performing loans as loans that are in default or close to default, with a credit score of “sub-standard”, “doubtful” or “loss.” 

The COVID-19 Credit Stimulus Policy should lower the non-performing loan (NPL) ratio of bank loans arising from debtors’ inability to make payment due to the economic impact of the global pandemic. 

We would welcome the opportunity to clarify how this new credit stimulus policy may affect your business.  

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