Why Did Borrowers Apply For Debt Restructuring During The COVID-19 Pandemic?

DOI

10.2991/aebmr.k.211226.021How to use a DOI?

Keywords

COVID-19; Small Medium Enterprises; debt restructuring; logistic regression; discriminant analysis

Abstract

The Coronavirus pandemic impacts Indonesia’s economic activity and increases bank loan default risk. Therefore, the Financial Services Authority regulates the provisions for restructuring credit facilities for debtors directly or indirectly affected by the pandemic. This study is to analyze the profile of debtors in times of crisis, what kind of debtor profile might apply for credit restructuring. We analyze a set of debtor profiles from SMEs to ascertain which factors determine the probability of restructuring credit facilities during covid19. This research uses a debtor profile estimation method for Small and Medium Enterprises. To analyze the data we used logistic regression method and discriminant analysis method. We collect the data from one of the largest banks in Indonesia. We found that the debtor’s business age, the loan limit provided by the Bank, loan size, and debtors’ profitability were factors that can explain why debtors apply for debt restructuring during the pandemic. This study was conducted to provide empirical evidence that several factors can influence the quality of debtor credit facilities during the pandemic of COVID-19.

Copyright

© 2021 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Hafidz Syihab
AU  - Zuliani Dalimunthe
PY  - 2021
DA  - 2021/12/31
TI  - Why Did Borrowers Apply For Debt Restructuring During The COVID-19 Pandemic?
BT  - Proceedings of the 3rd International Conference on Business and Management of Technology (ICONBMT 2021)
PB  - Atlantis Press
SP  - 157
EP  - 167
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.211226.021
DO  - 10.2991/aebmr.k.211226.021
ID  - Syihab2021
ER  -