Wrong choice of customers is one cause in underperforming loans faced by the Rural Credit Bank (BPR). BPR has problems in selecting debtors and in monitoring them. “Until now, creditworthiness assessment in BPR is subjective, depending on the skills of credit staff,†Ardito Bhinadi, S.E., M.Si., explained in an open examination of doctoral promotion of Economics Program, Faculty of Economics and Business, UGM, Tuesday (26/1.
Therefore, the man born in Gunung Kidul, 21 September 1973, said that we need more objective creditworthiness assessment system. Besides, the bank should not rely too much on their credit staff. In this case, credit scoring system can be used as a device to assess creditworthiness more effectively and efficiently. “By applying more measurable creditworthiness assessment system, risks of underperforming loans will reduce,†said the lecturer of Faculty of Economics, UPN Veteran Yogyakarta.
Defending his dissertation entitled “Credit Scoring and Probability of Underperforming Loans for Loan Distribution in Micro-Finance Institutions Year 2007: Case Study of BPR XYZ in Yogyakarta Special Province†in front of Board of Examiners, Ardito revealed that loan distribution to micro-business groups has the lowest risk. In addition, his research showed that the low interest does not guarantee that the loan has a low risk. The high number of problems in underperforming loans with low interests happened because of bad moral. Besides, the higher liquidity of a collateral, the lower the risk. Meanwhile, agreement-bound loans has lower risks.
Added by the husband of Erni Indriyani S.T., that the loan distribution to trading sector, hotels and restaurants still attracts customers than other sectors. The underperforming loan probability at BPR XYZ that he researched was apparently influenced by interest rate, ratio of collaterals, risk level of collaterals, and customer risk level.
“The higher interest, the higher probability of underperforming loans. The higher ratio of collaterals on loans, the lower probability of underperforming loans. The higher risk level of collaterals, the higher probability of underperforming loans. The higher risk level of customers, the higher probability of underperforming loans,†Ardito explained in BRI Auditorium of Master of Science and Doctoral Program at UGM.