Despite the completion of the transition to OJK's SLIK (Financial Information Service System) a while ago, the term BI Checking continues to be widely employed by various stakeholders.

Ever wonder what prompted this shift in the system and what impacts has it had on borrowers and lenders in Indonesia?

Understanding BI Checking and SLIK OJK

SLIK OJK serves the same purpose as BI Checking, which is to assess a debtor's creditworthiness. The primary distinction between the two lies in their administrative oversight: while BI Checking falls under Bank Indonesia's jurisdiction, SLIK OJK is regulated by the Financial Services Authority (OJK).

Contained within this service is a record of credit history stored in the Debtor Information System (SID). This record can be shared among various banks and financial institutions. 

Therefore, SID plays a pivotal role in determining whether a loan application will be approved or denied, whether it's business loans, unsecured credit (KTA), home mortgages (KPR), or credit card applications.

Following the rebranding of BI Checking to SLIK, the SID has been renamed as debtor information (iDEB). In November 2022, OJK also introduced the iDEBku application, which is accessible to both banking and non-banking financial service institutions (LJK).

Within it, the information exchanged encompasses details about the debtor's identity, the ownership, and management of the associated business entity, the amount of financing received, as well as the credit repayment history.

SLIK OJK's Key Implications for Debtors and Creditors

Last month, CNBC Indonesia reported that OJK is currently establishing a Fintech Lending data center, known as Pusdafil. This data center will facilitate the integration of online loan applications with SLIK.

Agusman, the Chief Executive overseeing Financing Institutions, Venture Capital Companies, Microfinance Institutions, and other Financial Services Institutions, stated that this new system will assess the feasibility of extending credit and ensuring the financial health of customers. It also aims to streamline accessibility and unify operations between national and regional headquarters.

The establishment of this data center is significant, primarily due to the surge in adoption of Buy Now Pay Later (BNPL) services and online loans.

Late payments or delays in these services can negatively affect a person's creditworthiness, something that most Indonesian BNPL users haven't quite realized yet. Bank BTN even reported a rejection rate of 30% for house mortgage applications from customers with unfavorable credit status.

Due to this, Noviady Wahyudi, the Director of Consumer Banking at CIMB Niaga, believes it would be beneficial to establish connectivity between pay later services and the banking system. This way, the convenience of pay later services can be coupled with banking products and services, thereby mitigating the risk of payment delays.

For creditors themselves, SLIK OJK can help mitigate the risk of encountering bad or problematic credit in the future, while also promoting transparency in credit management.

By promptly identifying emerging risks, financial institutions can implement timely measures to mitigate potential threats to their stability and solvency.

Mitigating Risks in Indonesia's Financial Sector

The introduction of the iDEBku application and the forthcoming Fintech Leading data center further demonstrate Indonesia's commitment to modernize and enhance the efficiency of its financial system.

For debtors, this shift underscores the importance of managing debt obligations responsibility, especially in the age of BNPL services and online loans. SLIK OJK also provides creditors with a powerful tool to proactively manage risks and ensure their stability and solvency in the market.

Have concerns about the crucial shifts in Indonesia's financial landscape? Connect with our industry experts who can offer you tailored insights and strategies for effective risk mitigation. 

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