IDEAS home Printed from https://ideas.repec.org/a/idn/journl/v7y2005i4dp584-619.html
   My bibliography  Save this article

Default Risk Dan Penjaminan Kredit Ukm

Author

Listed:
  • Untoro

    (Bank Indonesia)

  • Perry Warjiyo

    (Bank Indonesia)

Abstract

This paper asserts that the credit guarantee for the Usaha Kecil Menengah (UKM, Small-Medium Scale Enterprise) is a necessity to encourage the bank to allocate the credit. This allocation requires the identification of the default risk accompanying the credit allocation, after which, we can define the guarantee capacity of the Lembaga Penjaminan Kredit (LPK) and the risk sharing among the parties. Using the Merton method, the result shows the default risk of UKM is 0.7%. Next, we apply this value in the gearing ratio method to calculate the credit guarantee capacity, 142 times of the equity owned by the LPK. On practice, this large capacity should be rationalized to maintain the sustainability of the LPK it self. We analyze five different credit-guarantee schemes based on the involvement of different institutions. The best scheme for a certain region should consider the fund availability and the quality of human resources on the corresponding region.

Suggested Citation

  • Untoro & Perry Warjiyo, 2005. "Default Risk Dan Penjaminan Kredit Ukm," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 7(4), pages 584-619, March.
    • Handle: RePEc:idn:journl:v:7:y:2005:i:4d:p:584-619
    DOI: https://doi.org/10.21098/bemp.v7i4.125
    as

    Download full text from publisher

    File URL: https://bulletin.bmeb-bi.org/cgi/viewcontent.cgi?article=1454&context=bmeb
    Download Restriction: no
    File URL: https://libkey.io/https://doi.org/10.21098/bemp.v7i4.125?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    Credit guarantee; default risk; Small-Medium Scale Enterprise; UKM; Merton Method; gearing ratio method;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:idn:journl:v:7:y:2005:i:4d:p:584-619. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lutzardo Tobing or Jimmy Kathon (email available below). General contact details of provider: https://edirc.repec.org/data/bigovid.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.