The restructuring of credit and lease agreements and its impact on micro, small, and medium-sized enterprise and insolvency risks amid the pandemic: A normative juridical method

Abstract

Micro, small, and medium-sized enterprises (MSMEs) play a crucial role in Indonesia’s economy, contributing to job creation, income growth, and wealth distribution (Koeswahyono et al., 2022). This research aims to analyze the impact of the COVID-19 pandemic on lease agreements (leasing) in the non-banking financial sector, particularly in financing companies. The research is conducted through a normative juridical research method. The main findings of this study show that credit restructuring is a government solution to address instalment payment difficulties, especially for MSME debtors. The article also addresses legal certainty issues in lease agreements, mainly due to regulatory gaps in the Civil Code. With specific conditions, credit restructuring is provided with a maximum limit of IDR 10 billion (Siregar et al., 2021). This research concludes that, despite being considered an optimal solution, credit restructuring also has negative impacts, and legal certainty is critical in this context. Using data from the Financial Services Authority in 2021, the article explains that credit restructuring has positively stimulated Indonesia’s economic growth. MSME debtors are the main focus, comprising 39.73 percent of the total credit restructuring. This policy is seen as a strategic step to support economic recovery, especially considering the central role of MSMEs in the national economy.