ANALYSIS OF NON-PERFORMING LOANS OF

FINTECH COMPANIES DURING THE COVID-19

PANDEMIC
1st Zety Ma’summah1, a), 2nd Baldric Siregar2, b
1
Department of Accounting, STIE YKPN Yogyakarta, Yogyakarta, Indonesia.
2
Department of Accounting, STIE YKPN Yogyakarta, Yogyakarta, Indonesia..
a)
Corresponding author: masummahzety@gmail.com
b)
baldricsiregar@gmail.com

Abstract. This research aims to determine and analyze the amount of non-performing loans in Financial Technology
(FINTECH) companies in Indonesia during the Covid-19 pandemic. This study uses a sample of financial statement data
with a purposive random sampling method from January 2020 - December 2020. Data collection is carried out through
the official website of the financial services authority and the type of data taken is secondary data. The results showed
that non-performing loans in Financial Technology (FINTECH) companies have an average Non-Performing Loan
(NPL) value of 6.08% greater than the 5% maximum limit set. Where these conditions indicate that non-performing loans
in Financial Technology (FINTECH) companies are problematic or unhealthy. The increase in non-performing loans
began to increase in March 2020 after the start of the covid-19 outbreak in Indonesia.

INTRODUCTION
The era of globalization has had a major impact on all sectors of human life, one of which is technology and the
internet, technology and the internet have a huge role in supporting all activities of human life, the enormous use of
digital technology in Indonesia certainly has an impact on several sectors, one of which is the business sector or
business industry which then gives birth to online trading or e-commerce. On the other hand, the impact of this is
also characterized by the presence of many online lending activities in the community. This is the impact of
technological advances and the many loan offers with easier and more flexible terms and conditions compared to
banks and can be used as an alternative source of financing for micro, small and even medium enterprises. Ernama
Santi et al., (2017)
The financial services industry is currently experiencing rapid innovation and development. The innovation and
development of financial services that have been influenced by technological developments is financial technology
(fintech). The development of fintech in Indonesia, which is the country with the largest population in Southeast
Asia and the fourth in the world, is the largest market for fintech. According to the Indonesian Fintech Association
(IFA), the number of fintech players in Indonesia grew 78% in 2016 IFA recorded around 135-140 start-up
companies recorded. (Anita Chaudhari, Brinzel Rodrigues, 2016) This shows that Indonesia welcomes the presence
of fintech to meet financial needs. Giovanni et al., (2021). Fintech is recognized as one of the most important
innovations in the financial industry and is growing rapidly, partly driven by the sharing economy, regulation, and
information technology Lee & Shin (2018).
Data from the Financial Services Authority (OJK) shows that over the past two years, loans disbursed have
reached Rp25.59 trillion. This amount is still very small compared to loans disbursed by conventional banks or other
financial institutions. The number of fintech lending providers registered and licensed by the Financial Services
Authority (OJK) continues to mushroom, reaching 99 companies on February 1, 2019. In January and February
2019, there were an additional 11 fintech lending companies. The number is already higher than the position in
December 2018, which was 88 organizing companies. Savitri et al., (2021)
The risk that may occur is default or many customers who have received loans do not want to pay or pay late. So
that it will have an impact on increasing bad credit. Although fintech has carried out a very detailed and thorough
verification process related to loan disbursement, it is not a guarantee that it can reduce the lifting of bad credit. Bad
credit is a big problem for financial service players, including fintech lending. Fintech still gets concessions related
to provisions that limit the amount of loan interest, for organizers who are not registered with OJK. Munandar et al.,
(2021).
March 2020 Corona Virus Disease (Covid-19) spread in Hubei Province, China. The spread is very fast and
occurs on a global scale, finally the World Health Organization (WHO). Apparently Indonesia is also not spared
from the spread of the Covid-19 outbreak. Based on data obtained from the task force for the acceleration of
handling Covid-19, as of September 20, 2021, 4,192,695 people in Indonesia have been positively infected with
Covid-19. In response to this, all efforts have been made by the Government of Indonesia to be able to stop the
spread of the Covid-19 virus, including by forming a Rapid Motion Team in the airport, port and cross-border land
post areas, but in fact the spread of Covid-19 is increasingly widespread in Indonesia and on Wednesday, June 21,
2023, the government decided to lift the Covid-19 pandemic status. (www.cnbcindonesia.com)
Non-performing credit is the provision of a credit facility containing the risk of congestion. Non-performing loan
(NPL), is the occurrence of a breach of promise in credit repayment, so that there are arrears or potential losses that
occur in the debtor's business so that it has the possibility of future risks in a broad sense for banks Firmansyah &
Fernos, (2019). According to data compiled by the Financial Services Authority (OJK) in 2020 the 90-day NPL limit
reached 6.08 percent and was included in the unhealthy category. When compared to the previous year in 2019 the
NPL in 2020 experienced a very significant increase. Statistics on peer-to-peer fintech (P2P lending) or fintech
issued by the Financial Services Authority noted that the level of bad credit or non-performing loans (during the
corona virus pandemic) had touched 4.22 percent as of March 2020. This number is almost touching the maximum
permitted limit of 5%. Munandar et al., (2021)

FIGUR 1. NPL Chart of Fintech Companies in the Last Five Periods

Based on the graph above, non-performing loans from 2018 amounted to 2.38% and continued to increase until
2020 until it reached 6.08%. The increase in non-performing loans can be caused by the inability of people to repay
loans during the Covid-19 pandemic. Increasing non-performing loans will jeopardize the performance of fintech
companies in Indonesia.

METHODOLOGY
Research used in this study is a quantitative approach research. Data collection using research instruments, data
analysis is quantitative and statistical. Each variable has a fixed and definite value and shows a causal relationship.
The data used in this study are data derived from the financial statements of the Financial Services Authority
website and each company.

Population and Sample

The population taken in this research is the financial statements of financial technology companies (FINTECH)
as many as 155 companies registered with the financial services authority and their financial reports published from
January 2020 - June 2023. The technique of determining the sample using purposive random sampling, namely
determining the sample based on certain considerations. Where the considerations are financial reports in the form
of financial technology company reports (FINTECH) that present complete financial reports, financial reports
during the covid-19 pandemic, namely from January 2020 - December 2020.
 Data Collection Technique
This research uses data collection methods with literature study. The type of data used in this study is secondary
data that has existed before this research was conducted and was deliberately collected by researchers for
researchers' data needs. The data sources used in this study were obtained from the financial statements of financial
technology companies from January 2020 to June 2023 which are registered with the Financial Services Authority
published on the official website through the site www.ojk.go.id.

Variable Operational Definition

The independent variable in this research is NPF (Non Performing Financing) which is a ratio used to measure
the management's ability regarding the level of financing problems faced by banks.
Problem Financing
NPF= x 100 %
Total Finance

Data Analysis Technique

The statistical analysis technique carried out in the study was a descriptive statistical test using the help of SPSS
version 24 software.

RESULT AND DISCUSSION

Non-performing loan ratio (NPL) can have a big influence on Financial Technology (FINTECH) companies.
NPLs, also known as non-performing loans, can indeed have an impact on reducing the capital of fintech companies.
If this is allowed, it will definitely have an impact on lending in the following period. If creditors no longer fulfil
their obligations to pay instalments, it is certain that the company will experience a loss of revenue. High NPLs also
result in the company's intermediary function not working optimally because it reduces the company's turnover and
companies so that it reduces the company's opportunity to earn income. In other words, NPLs reduce the company's
profitability.
The Non-Performing Loan value of the Financial technology Company (fintech) is 3.41%. This is considered
healthy because it is in accordance with the guidelines of Bank Indonesia (BI) through the Bank Indonesia
Regulation (PBI) stipulating that the ratio of non-performing loans (NPL) is 5%. The maximum NPL standard used
to assess a financing institution has a healthy NPL is a maximum of 5%.
Based on the one sample t test, financial technology companies during the Covid-19 pandemic are at a healthy
level. However, it is different from the research conducted by Munandar, Alwi, Nurhayati, Herman (2021). Where
during the covid 19 pandemic the Non Performing Loan (NPL) value is or exceeds the maximum Non Performing
Loan (NPL) limit set at 5%. NPLs continue to increase beyond the expected maximum limit of 5% starting in April
2020 - November 2020. In April 2020 the corona virus began to spread rapidly in Indonesia. And research
conducted by Giovanni et al., (2021), also states that during the covid-19 pandemic the financial performance of
companies - fintech companies. The impact of the covid 19 outbreak resulted in a slowdown in national economic
growth and FINTECH companies experienced a fairly high increase in bad debts.
Because the results of this study are not supported by several previous studies, researchers used the paired t-test
to determine the difference in NPLs at the beginning of the covid-19 pandemic with the end of the covid-19
pandemic. The results showed that there was a difference in nonperforming loans at the beginning of covid-19 and
the end of covid-19. So it can be concluded that covid-19 affects non-performing loans in financial technology
(fintech) companies.

CONCLUSION
Suggestions to minimise the increase in non-performing loans in the future, Financial Technology (FINTECH)
companies should be more careful in lending, especially during the covid 19 pandemic as it was. For future research,
it can conduct research by examining factors that affect non-performing loans such as credit granting procedures,
credit abuse, business growth during the covid 19 pandemic and many other factors that can be studied. The
limitation of this research is the short time for researchers to conduct research so that it makes this research less
optimal.

ACKNOWLEDGMENTS
The author expresses his deepest appreciation to all those who have helped the author in completing this
scientific work. Without your help, encouragement and prayers the author would not have been able to complete this
scientific work properly. The author hopes that this scientific work can be useful.

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