BNI Strengthens Governance of People's Business Credit Distribution

PT Bank Negara Indonesia (Persero) Tbk, or BNI, is undertaking a series of governance strengthening measures for the distribution of People’s Business Credit (KUR) to ensure financing is more targeted, measurable, and in line with prudential principles. The reinforcement covers credit analysis, verification of prospective debtors, disbursement, monitoring of fund usage, process digitalisation, and regular audits. “BNI continues to strengthen the governance of KUR distribution so that financing is truly received and utilised by eligible business actors,” said BNI Corporate Secretary Okki Rushartomo in a written statement. He said this step is part of the company’s commitment to maintaining the quality of government programme credit distribution. BNI ensures KUR is granted to eligible business actors and utilised according to the financing objectives. “Strengthening is carried out from the credit analysis, verification, and disbursement stages, to monitoring fund usage and evaluating credit quality,” he said. One of the reinforcements implemented by BNI is applying direct, one-on-one credit analysis to farmers without involving a collection agent. Through this process, the bank can obtain direct information regarding the business profile, financing needs, repayment capacity, and planned use of funds from prospective debtors. In addition, BNI is strengthening its ecosystem-based financing distribution pattern. Under this scheme, BNI collaborates with core companies that are BNI corporate customers and act as offtakers. The core companies also support business mentoring, absorption of production output, and monitoring of credit implementation. “The ecosystem-based approach enables mentoring, business monitoring, and market certainty for farmers’ production. Thus, financing is not only distributed but can also support the sustainability of the debtor’s business,” Okki said. BNI has also implemented a radius restriction to facilitate the Know Your Customer process, business verification, land monitoring, and supervision of debtor activities after disbursement. This policy is intended to allow the debtor identification and monitoring process to be carried out more closely and effectively by the relevant units. From a technological perspective, the credit process is conducted digitally so that debtor data can be monitored more measurably. Through this system, BNI can monitor farmers’ names, land locations, cultivation stages, business development, and credit usage by each debtor. “Digitalisation of the credit process allows BNI to monitor farmer data, land locations, cultivation stages, and credit usage more measurably. Monitoring and audits are also conducted periodically to maintain credit quality,” Okki said. In addition to digitalisation, BNI conducts regular monitoring to ensure the debtor’s business runs according to plan, funds are used according to the financing objectives, and credit quality is maintained. The company also conducts routine audits of every credit provision to ensure the distribution process complies with regulations, detect potential irregularities early, and strengthen the accountability of all parties involved. Okki added that this governance strengthening is also in line with BNI’s steps to objectively follow up on any indication of irregularities. Previously, regarding an alleged KUR irregularity case in Jember, BNI asserted that the ongoing legal process is a follow-up to the company’s report to law enforcement after discovering indications of irregularities in the credit application and distribution process. “The Jember KUR case originated from a BNI report to law enforcement. BNI respects the ongoing legal process and is cooperative in the investigation,” Okki said. BNI applies a zero-tolerance principle towards any form of fraud and violation. If any internal or external parties are proven to have committed violations, BNI ensures that the matter is followed up in accordance with legal provisions and the company’s internal regulations. According to Okki, the actions of individuals proven to have violated regulations do not represent the company’s policies or practices. BNI ensures that credit distribution is carried out with reference to prudential principles, good governance, and applicable regulations. As one of the KUR distributing banks, BNI reaffirmed its commitment to continue supporting access to financing for productive business actors. Through direct analysis with farmers, ecosystem-based financing, monitoring radius restrictions, digitalisation of the credit process, regular monitoring, and routine audits of every credit provision, BNI hopes that KUR distribution can proceed in a more measurable, transparent, and targeted manner.