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eer-to-peer (P2P) lenders to small and medium enterprises (SMEs) believe the coronavirus outbreak, which has disrupted most economic activities in Indonesia, will not affect their loan repayments.

Aria Widyanto, the chief risk and sustainability officer of Amartha, a P2P lending platform that primarily funds SMEs owned by women in villages, said that he was sure that the financial technology (fintech) company’s borrowers would be able to repay loans on time because he believed the rural economy remained resilient despite the COVID-19 pandemic’s catastrophic effect on many other sectors.

“The economies of villages are more resilient because they are more isolated,” he said on March 26 during a video conference. “These SMEs will conduct business as usual despite the turbulence in the macroeconomy.”

Aria said that Indonesia had faced many crises but that people continued to buy daily necessities, which are often provided by SMEs.

He added that SME entrepreneurs were resilient because their businesses were often the main source of their income and they needed to keep working in order to survive. “Some of them are producing clothes, but since they are not selling well during the outbreak, they can switch to selling tempeh the next day to have an income,” Aria said.

He added that Amartha would not disburse or collect loans until April 6 to comply with government’s social distancing policy. Afterward, the company would resume collecting payments only from the leaders of borrowing groups so borrowers could repay their loans with less physical contact.

The fintech company disburses loans and collects repayments at a biweekly group meeting. However, since the government has urged people to stay at home, Amartha has decided to suspend its on-field activities.

“This is the best option given the current force majeure,” Aria said. “Hopefully, we can continue business as usual soon.”

Amartha provides an insurance option for lenders to SMEs through its app. If the borrower cannot repay the loan, the insurance will cover 75 percent of the outstanding debt.

Amartha has disbursed Rp 2.3 trillion (US$140 million) in loans to 490,000 borrowers with a 0.5 percent nonperforming loan (NPL) rate.

Another P2P lender, Crowdo, said it used artificial intelligence to determine risk and provide lenders with more comprehensive information about borrowers’ businesses.

The fintech system classifies businesses’ risk exposure to COVID-19. It classifies hotels and restaurants as high-risk. It also explains potential risks in business factsheets.

“We have yet to see a significant change in our business,” said Crowdo Indonesia commercial officer chief Ikram Jeihan in a written statement. “The loan payment due date is still on schedule.”

Crowdo has funded 5,000 projects in Indonesia and has an NPL ratio of 1.89 percent.

Modalku has also implemented risk-mitigating measures such as tighter selection criteria for new and existing SMEs that want to raise funds through the fintech company.

Modalku said it would examine food and beverage businesses, the travel sector and cross-border trade in evaluating loan applications since those businesses were the most affected by the pandemic.

“We will also adjust each borrower’s loan limit and terms depending on their business profile to mitigate the effect of the spread of COVID-19,” Modalku cofounder and chief executive officer Reynold Wijaya said on Tuesday.

Modalku offers loans of up to Rp 2 billion to SMEs without a collateral requirement. The company also operates in Malaysia and Singapore under the name Funding Societies. As of March, it had disbursed a total of Rp 13 trillion in business loans in the three countries.