TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Jamkrindo, Askrindo under pressure amid soaring microloan defaults
Two state-run credit guarantee insurer companies are running short on capital needed to service claims on defaults under the microcredit program (KUR), risking their ability to provide future loan guarantees and support the government-led low-cost financing assignment.
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
Indonesian millennials know how to assess their financial capabilities, allowing them to obtain loans close in size to the amount requested. (Shutterstock/Icatnews)
T
wo state-run credit-guarantee insurer companies are running short on capital needed to service claims on defaults under the microcredit program (KUR), risking their ability to provide future loan guarantees and support the government-led low-cost financing assignment.
Those two firms are PT Jamkrindo and PT Askrindo, both subsidiaries of state-owned insurer holding Indonesia Financial Group (IFG).
IFG said that claims from the defaulted microcredit program have surged to a new height with both companies reporting a Rp 2.8 trillion (US$183.4 million) payment to lenders in the first half of this year, and that the figure might double at the end of this year.
In comparison, both companies only paid Rp 3.53 trillion worth of claims for the full year of 2021.
Pantro Pander Silitonga, IFG’s business director, said these trends would erode both firms’ capital, reflected by a jump in their gearing ratio that is expected to be above 20 times next year and will be almost 24 times a year later, exceeding the safe threshold of below 20 times set by Financial Services Authority (OJK).
The gearing ratio measures the ability of insurer firms to provide guarantee or re-guarantee on loans.
“At this rate, both firms will soon be no longer able to provide credit-guarantee services,” Pantro told reporters on Thursday during a briefing hosted by State-Owned Enterprises (SOEs) Ministry.
