Application of the Proportionality Principle in the Credit Restructuring Policy for the SMEs Financial Performance During the Covid-19 Pandemic in Indonesia

DOI

10.2991/assehr.k.201209.352How to use a DOI?

Keywords

Covid-19, Credit Contract, Restructuring

Abstract

This article aimed to analyze how to apply the fundamental principle of proportionality in the restructuring of credit contracts to stabilize economic growth in Indonesia during the Covid-19 pandemic period. The spread of Covid-19 directly or indirectly affects debtors’ output and ability, including small and medium-sized enterprises (SMEs). This potentially disrupts the efficiency of the banking system and the stability of the financial system which can affect economic growth. Hence, promoting the optimization of the banking intermediation feature, maintaining stability of the financial system, and supporting SMEs’ economic growth required economic stimulus policy as Covid-19’s countercyclical effect deployment. This research in this study uses the normative legal research. It involves the study of the law as an object and removes any non-legal material from the scope of this research. The findings showed that Credit restructuring for SMEs can help banks to suppress the growth rate of bad credit affected by the spread of Covid-19. Practically the implementation of the restructuring of contract credit as “a suggestion” and not as obligation that must be obeyed by financial service companies so the policy is in favor of the interests of entrepreneurs or investors and does not protect the interests of people who experience the economic impact of Covid-19.

Copyright

© 2020, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Kukuh Tejomurti
AU  - Nurhidayatuloh
AU  - Irawati Handayani
PY  - 2020
DA  - 2020/12/14
TI  - Application of the Proportionality Principle in the Credit Restructuring Policy for the SMEs Financial Performance During the Covid-19 Pandemic in Indonesia
BT  - Proceedings of the 2nd International Conference of Law, Government and Social Justice (ICOLGAS 2020)
PB  - Atlantis Press
SP  - 685
EP  - 691
SN  - 2352-5398
UR  - https://doi.org/10.2991/assehr.k.201209.352
DO  - 10.2991/assehr.k.201209.352
ID  - Tejomurti2020
ER  -