The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.
Opinion

Delinquent debtors in Indonesia: Pay up or we’ll print

All banks have to deal with non-performing loans (NPLs) and delinquent debtors. In Indonesia, a market with weak bankruptcy laws, rampant corruption and family-controlled corporations, the problem is serious.

So serious in fact that the head of the country’s largest bank by assets, Bank Mandiri, has taken a highly controversial route to get his bank’s money back. In June, Agus Martowardojo, Mandiri’s CEO, listed the bank’s 30 largest delinquent debtors in an effort to name and shame them into action.

Mandiri’s loan problems are dire: NPLs at the end of 2005 were 26.5% of total loans and more than 14% on a net basis. The government says they should be no higher than 5%.

The divulged debtors account for 60% of Mandiri’s NPLs. While bank management has offered to assist recalcitrant debtors to repay loans, it has also promised to sue if they don’t.

Although the bank says it is mindful of the potential damage caused to the bank’s reputation by the actions, it feels it has little choice given the financial situation. In any case, says management more cheerfully, since being named, some of the debtors have already begun paying money back.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree