JAKARTA - Modalku applies the responsible lending principle as a risk mitigation measure to anticipate the impact from COVID-19 virus. This principle is the principle of Modalku's operation in assessing MSME borrowers and their financial ability to repay loans. Modalku also has responsibilities towards lenders who also support the development of MSMEs.

Modalku's Co-Founder & CEO, Reynold Wijaya, said, "We have been monitoring the development of the COVID-19 virus since January 2020. The current economic dynamics are affecting the business conditions of MSMEs in certain sectors that are borrowers in Modalku. Our growth strategy is currently focusing on MSMEs and their networks and discussing to find the best solutions in supporting the sustainable development of MSME businesses in Indonesia. "

Modalku has implemented steps to monitor and manage risk in the portfolio for the future. First, Modalku will conduct a more comprehensive selection process for prospective borrowers and MSMEs who have become borrowers in Modalku. Some industries such as food & beverage, travel, cross-country trade, and service industries that depend on labor from affected countries in Southeast Asia will receive more attention from Modalku when evaluating loan applications. 

Second, Modalku will react more quickly to changes in macroeconomic conditions by adjusting the limit and loan tenor. The loan limit & tenor figure will be adjusted to the type of loan and business profile of each MSME, so that this adjustment will be made on a case by case basis.

Third, maximizing collaboration with e-commerce platforms where most of the sellers enter the micro segment. In the current condition of physical distancing, business transactions through e-commerce can develop well because people will tend to shop online, both in meeting basic needs and medicine / health. (LM)