The Effect Credit Restructuring Relaxation on Financial Performance in LPD Buleleng Regency During the Pandemic of Covid-19

Abstract

During the Covid-19 pandemic, several Village Credit Institutions (LPD) experienced difficulties in their operations, so doing business would need to make various efforts. The implementation of various programs to support policies related to credit is carried out to maintain the growth of Village Credit Institutions (LPD), one of which is the relaxation of credit restructuring policies for people who have credit at Village Credit Institutions (LPD). This study aims to analyze the effect of the relaxation of credit restructuring on LPD financial performance during the Covid-19 pandemic. The nature of this research is an explanation with quantitative methods to test the causality of these variables. The variables in question are the relaxation of credit restructuring and performance. The total population of this study was 81 LPD. Determination of the sample using random sampling technique to obtain a total sample of 46 LPD. This research data collection uses documentation and questionnaire techniques. The data technique used in this study is a simple linear regression with the help of the SPSS 21 application. The results of this study are a positive analysis credit restructuring regression coefficient of 0.968 which means that each increase in credit restructuring by one unit will lead to an increase in the financial performance of 0.968 with the assumption of independent variables other constant. The results of data analysis showed that credit restructuring partially affected financial performance. The key is that credit restructuring has a significant positive effect on the financial performance of the Buleleng Regency LPD during the Covid-19 Pandemic.

The Economic Security of Households Affected by the COVID-19 Pandemic in Rural Java and Madura

“…Generally, late payments damage a household's credit history, hindering its ability to obtain credit in the future, and may even result in the loss of collateral for debt [49]. The pandemic has hampered the human capacity to perform essential financial functions, such as paying credit [50].…”

The Effect of Non-Performing Loans on Bank Liquidity During the Covid-19 Pandemic

“…11/POJK.03/2020. This policy aims to provide credit relaxation to debtors affected by the pandemic with various schemes, including extending the credit period, applying grace periods, reducing interest rates, reducing principal arrears (cut loss), reducing interest arrears, adding credit facilities and converting companies into shares (Nopiyani et al, 2021). The implementation of the policy causes banks to face liquidity risks.…”

Credit Quality as a Moderating Effect of Capital Adequacy and Credit Distribution on the Profitability of Village Credit Institutions

“…According to (Dewi, 2022) non-performing or bad credit is the failure of the debtor to fulfill his obligation to pay installments of the principal along with the interest that has been agreed by both parties in the credit agreement. Good credit quality can increase LPD profitability, while low credit quality will reduce LPD profitability due to non-payment of credit interest which is the main profit of LPD (Nopiyani, 2021). The number of non-performing loans results in reduced funds or capital raised and increased credit risk.…”