Research Article
Analysis of The Credit Crunch Phenomenon during the Covid-19 Period in Indonesia: Demand, Supply, and Monetary Policy Approach
@INPROCEEDINGS{10.4108/eai.31-3-2022.2320945, author={Qori’atul Septiavin and Cintya Khairun Nisa and Feberianto Hieronimus Sipayung and Kelvin Rizky Novsa Situmorang and Fakhrur Rozi and Nursechafia Nursechafia}, title={Analysis of The Credit Crunch Phenomenon during the Covid-19 Period in Indonesia: Demand, Supply, and Monetary Policy Approach}, proceedings={Proceedings of the 1st International Conference on Contemporary Risk Studies, ICONIC-RS 2022, 31 March-1 April 2022, South Jakarta, DKI Jakarta, Indonesia}, publisher={EAI}, proceedings_a={ICONIC-RS}, year={2022}, month={8}, keywords={banking bi7drr covid-19 pandemic credit crunch npl}, doi={10.4108/eai.31-3-2022.2320945} }- Qori’atul Septiavin
Cintya Khairun Nisa
Feberianto Hieronimus Sipayung
Kelvin Rizky Novsa Situmorang
Fakhrur Rozi
Nursechafia Nursechafia
Year: 2022
Analysis of The Credit Crunch Phenomenon during the Covid-19 Period in Indonesia: Demand, Supply, and Monetary Policy Approach
ICONIC-RS
EAI
DOI: 10.4108/eai.31-3-2022.2320945
Abstract
Credit crunch is a phenomenon marked by banks' reluctance to extend credit, impacting both the real sector and financial stability. Therefore, this study aims to analyze whether there are cases of credit crunch due to the Covid-19 pandemic with a panel data method of 33 provinces in Indonesia from June 2019 to May 2021. This study uses the Random Effect Model with the General Least Square (GLS) method. From the demand side, interest rates during the pandemic have a positive relationship with lending. Meanwhile, the supply side shows that banks are increasingly cautious (risk aversion) in lending, which can be seen from the NPL and third-party funds variable during the pandemic has a negative effect. Lastly, the BI7DRR as the monetary policy has a negative impact. These findings reveal a decline in credit supply during the Covid- 19 period that needs to be concerned with the risk management of lending to debtors