Analysis of Bad Credit at PT. State Savings Bank (BTN)

Bad credit (non-performing loans) at Bank BTN is a reason for investment decisions for the public and investors. By knowing bad credit in a company, it provides clearer information for making investments. This research was conducted to provide information about bad credit at BTN bank, which is one of the most trusted banks in Indonesia. It is hoped that this research will help the public increase their competency in how to invest through the value of bad credit or non-performing loans. This research aims to analyze the influence of bad credit on investment decisions at BTN bank. The research method used is a qualitative research method using Bank BTN financial report data regarding bad loans or non-performing loans from 2007 to 2022. This research suggests that investment decisions at Bank BTN can be based on the value of net bad loans which are still safe.


INTRODUCTION
A bank is a financial institution or business entity which, in its operational activities, collects funds from the public in the form of savings and distributes them to the public in the form of credit or other forms in order to improve people's living standards.Therefore banks play a very important role.This is because the main business of banks is to provide credit, and credit provided by banks has a very broad influence in all areas of life, especially in the economic sector.
In Banking Law No. 10 of 1998 article 1 paragraph 11 credit is the provision of money or bills that can be equivalent to it, based on an agreement or loan agreement between the bank and another party which requires the borrower to pay off the debt after a certain period of time.giving flowers.The types of credit according to Kariyoto (2017) in Suyatno's book are (1) Based on the use of credit (2) Based on the period of time for granting credit (3) Credit seen from the perspective of collateral (4) Based on the method of payment.Based on its provisions, Bank Indonesia (BI) classifies credit quality, namely (1) Current (fit), meaning that the credit disbursed does not cause problems, (2) special mention, meaning that the credit provided has started to have problems, so it needs attention, ( 3) substandard (substandard) if the payment of the credit provided has begun to falter, but the customer is still able to pay, (4) doubtful (doubtful), i.e. the customer's ability to pay is increasingly uncertain, and (5) loss (loss) if customers are no longer able to pay their loans, so they need to be saved (Febrianti, 2015) in (Nur Syahrini, 2017).
Providing credit that runs smoothly will develop and increase a country's economic activities.Because the loans provided by the Bank in the form of credit come from public funds, they have a high risk (asset risk), namely not returning the credit on time, which is called a Non-Performing Loan (NPL).Where one of the levels of bank health is measured by the level of the Non-Performing Loan ratio or commonly known as the "NPL Ratio" (Hariyani, 2008).Which as a result could disrupt the Bank's liquidity.
Bad credit is part of problem credit.Bad credit occurs due to breach of promise in repayment according to the agreement so that there are arrears, or potential losses in the debtor's company so that there is a possibility of future risks for the bank in a broad sense (Bankir, 2015).According to Hariyani (2008), bad credit can be caused by internal or external factors.Internal factors causing bad credit are: expansive credit policies, deviations in implementation credit procedures, bad faith from the owner, management or bank employees, weak bad credit information system.Meanwhile, external factors causing bad credit are: debtor's business failure, debtor's use of an unhealthy competitive banking climate, as well as decreased economic activity and high credit interest rates.
This bad credit is experienced by almost all banks in Indonesia, including Bank BTN.Logical factors that can cause bad credit at Bank BTN include a decrease in the borrower's ability to pay installments, economic and political uncertainty, or errors in credit risk assessment.Meanwhile, phenomenological factors, for example changes in consumer behavior or changes in market conditions.
Along with increasing business activity and economic growth in Indonesia, Bank BTN, as one of the largest banks that focuses on housing financing, has also experienced significant credit growth.However, at the same time, the risk of bad credit also increases.
Bad credit at Bank BTN can be done by considering the concept of financial literacy as a factor that can influence the occurrence of bad credit.Financial literacy here can be interpreted as an individual's ability to understand and manage their finances, including paying credit installments.
Financial theory also suggests that there are several factors that can influence the level of bad credit at Bank BTN, such as interest rates, economic growth, and banking regulations related to credit.In addition, the level of customer trust in a bank can influence the level of bad loans at that bank.
Based on the problems and preliminary discussion above, the author conducted research with the title "Analysis of Bad Credit at PT Bank Tabungan Negara (Persero) Tbk.".

THEORETICAL REVIEW Bad Credit
According to Hendy Herianto (2013), the definition of non-performing credit or bad credit is credit that occurs due to arrears in interest or principal installments, all credit that is included in the collectibility level is substandard, doubtful and bad.Meanwhile, according to Kasmir (2012), the definition of problem credit or bad credit is credit in which there are obstacles caused by 2 elements, namely the customer who intentionally or unintentionally does not make payments in his obligations.In the understanding of other experts, nonperforming credit is defined as credit that is classified as substandard credit, doubtful credit and bad credit (Haryani, 2010).
Based on the understanding of the experts above, it can be concluded that bad credit is a condition where debtors, both individuals and business entities, are unable to pay the installments or debts they owe to lenders on time.
This condition can be caused by many things, such as the debtor losing his main income, planned failure to make payments, and so on.Factors that cause bad credit.
Bad credit can be caused by internal or external factors according to Hariyani (2010:38) (2006,(21)(22) the factors that cause credit traffic jams are: The bank's weakness in conducting analysis, resulting in errors in decision making.

Customer weaknesses Planning
Planning is a picture before something is implemented.To start a business, of course you have to have a loan plan taken to expedite a business or start a business so that the business can run well.Without planning, the loan obtained will not be able to be used to run the business smoothly and will not be directed towards achieving business goals.

Relatively low income
If the income earned is relatively low, it is difficult for customers to repay the loan, because the income earned is only enough to meet daily needs.

Administration
Administration is the arrangement of an activity on a regular basis.The administration of a business must be regulated and financial income and expenditure controlled so that the running of the business can be regulated.1.Customer Delinquency 2.Natural Disasters 3. War 4.Changes in economic conditions 5.Technological change Based on the theoretical studies that have been explained, it can be concluded that the factors that cause bad credit to arise can come from external factors and internal factors or can also come from customers and the bank itself.

Bad Credit Indicator
According to Thamrin (2016) there are several indicators of bad credit, including the following :

In arrears
Credit is said to be problematic if the customer cannot pay off his obligations in accordance with the credit agreement that has been made.This arrears will result in giving a warning letter to the customer to immediately pay off their obligations.Credit is included in the substandard category if the fulfillment of obligations is more than 90 days in arrears.

Violation of credit agreements
The agreement between the debtor and creditor is contained in the credit agreement.The credit agreement contains the rights and obligations of the debtor and creditor.This agreement is intended so that all related parties can fulfill all their obligations properly.However, sometimes in the agreement there are violations that do not fulfill the agreement according to the agreement that has been made.

Confiscation of collateral
Providing collateral by the debtor is one way to reduce traffic jams in repayment obligation.The guarantee submitted by the debtor will be the burden of the debtor himself so that the debtor will be serious about paying off his obligations.If the debtor cannot pay off his obligations, the creditor can confiscate the collateral provided.This guarantee should be in excess of the credit provided.
Based on the explanation above, it can be concluded that the indicators for bad credit are delinquent payments, breach of credit agreements and confiscation of collateral.

Bad credit function
The function of credit in economic and financial life is in line the amount is as follows: 1.To increase the utility of money.With credit can increase the usability of money.This means that money is only saved alone will not produce anything useful.By giving it The credit money becomes useful for producing goods/services by the credit recipient.2. To increase the usability of credit items provided by the bank will be used by the debtor to process goods that are not useful to be useful or helpful.3. Credit can increase the circulation and traffic of money in this case money given or distributed will circulate from one region to another other regions so that an area that is short of money with If you get credit, the area will get additional money from other areas.4. Increase the circulation of goods.Credit can also increase or smooth the flow of goods from one region to another, so that the number of goods circulating from one region to another increases or credit can also increase the number of goods in circulation.Type of Credit 1. Consumer credit Consumptive credit is credit that is used for consumption Personally, in this credit there is no increase in goods and services which is produced because it is intended to be used or used by a person or business entity.

Pension Credit
Credit given to retired civil servants and their widows, ABRI and you, a BUMN/BUMD employee and his widow, a private employee have a pension fund foundation whose payments are made done in the city which is the same as where retirees live.

Elements of Credit
The elements contained in providing a credit facility (Ismail, 2010:94) are as follows: 1. Creditors Creditors are parties who provide credit (loans) to the other party who received the loan.These parties are usually individuals or business entity.Banks that provide credit to borrowers is a creditor.

Debtor
The debtor is the party who needs funds, or the party who get a loan from another party.

Trust
Creditors provide trust to the party receiving the loan (debtor) that the debtor will fulfill his obligation to pay The loan is in accordance with a certain agreed period of time.Bank is a loan to another party, the same as a bank give confidence to the borrower, that the borrower will be able to fulfill its obligations.4. Agreement An agreement is a contractual agreement or agreement carried out between the bank (creditor) and the borrower (debtor).5. Time Period.There is a period of time between granting credit and repayment, where This time period has previously been determined in advance, based on it's a mutual agreement.6. Achievement.There are objects in the form of achievements and counter-achievements when achieved agreement in the credit grant agreement between the bank and the customer debtor, in the form of interest or compensation.7. Risk There is a period of time between granting credit and repayment, allows for risks in the credit agreement.Therefore, to prevent this risk from occurring (in the form of default), then a bond of guarantee/collateral is held which is charged to the party debtor customers 8.Return Services In return for funds distributed by the creditor, the debtor will pay a certain amount of money according to the agreement.In conventional banking, the reward is in the form of interest, while in In Islamic banks there are several types of rewards, depending on the agreement.

Principles of Providing Credit
Principles of granting banking credit according to Article 8 paragraph (1) Law no. 10 of 1998 concerning Amendments to the Law Number 7 of 1992 concerning Banking determines: "In providing credit or financing based on sharia principles, commercial banks are required to have confidence based on an in-depth analysis of the debtor customer's intentions and ability and ability to pay off their debt or return the financing in accordance with what was agreed." Furthermore, the principles of providing credit are stated in the explanation Article 8 paragraph (1) Law no. 10 of 1998, determines that: "Credit or financing based on sharia principles provided by banks contains risks, so in its implementation banks must pay attention to the principles of credit or financing based on sound sharia principles.To reduce this risk, guarantees for providing credit or financing based on sharia principles in the sense of confidence in the ability and ability of debtor customers to pay off their obligations as agreed is an important factor that must be noticed by the bank.To gain this confidence, Before providing credit, banks must carry out a careful assessment of the debtor customer's character, abilities, capital, collateral and business prospects." From the provisions above, it can be concluded that banks must be careful in providing credit to prospective customers.Banks must First investigate whether the prospective debtor is the prospective debtor trustworthy and also reliable (bankable).The method that is still applied in analyzing potential debtors trustworthy or reliable is what is called the 5 Cs (Cashmere, 2011: 5), which includes: a. Character A belief that the nature or character of people will given the credit is completely believable, this is reflected in the setting the customer's background, both in terms of work background and others personal, such as the way of life or lifestyle that one adheres to, circumstances family, all of which are measures of willingness to pay.b.Capacity (Capability) Connected with education, business ability is also measured ability to understand government regulations.Likewise in his ability to run his business so far.In the end, your ability to return credit will be seen distributed.c.Capital (Capital) To see whether the use of capital is effective, look at the financial reports (balance sheet and income statement) by taking measurements such as from in terms of liquidity, solvency, profitability and other measures.Capital must also be seen from which sources of capital currently exist This.d.Collateral (Guarantee or collateral) It is a guarantee given by prospective customers, whether physical in nature or non-physical.Collateral should exceed the credit provided.The validity of the guarantee must also be checked, so that if something happens problem, then the collateral deposited will be used as quickly as possible Possible.e. Condition of Economy (Economic Conditions) When assessing credit, economic and political conditions should also be assessed now and in the future according to each sector, as well business prospects of the sector being run.Assessment of business prospects financed should really have good prospects, so The possibility of the credit having problems is very small.The distinctive characteristics of agreement law or contract law are in terms of freedom, equality and contractual binding.The fundamental principles or principles that govern contract law are: a.The principle or principle of consensuality Agreements can occur due to conformity of will (consensus) of the parties.In general, these agreements are possible made in a "free form" and made not formally but consensual.This principle concerns the occurrence of an agreement.Regarding the principle of consensuality, it is regulated in Article 1320 of the Civil Code which regulates the conditions for the validity of an agreement, where one of the conditions is the agreement of those/parties who bind themselves to an agreement.The meaning of the principle of consensuality is that basically the agreement and the commitment that arises from it have been born since the moment the agreement was reached.(Subekti, 2012:56) b.The principle or principle of binding force of agreement Affirms that the parties must fulfill what has been agreed is their bond to each other in their agreement held.This principle concerns the consequences of consent.The principle of binding force is regulated in Article 1315 of the Civil Code Thus, in general, no one can bind themselves in their own name himself or ask for a promise to be made rather than for himself Alone.Subekti (2012: 58) says that this principle is called the principle of the personality of an agreement.Binding oneself is intended to assume obligations or undertake to do something, whereas ask for a promise to be made, aimed at obtaining rights over something or can demand something.c.The principle or principle of freedom of contract.This principle allows the parties to make an agreement in accordance with their own free choice and each person has the freedom to make a contract with whomever they wish, apart from that the parties can determine for themselves the content and terms and conditions of an agreement with the limitation that the agreement This must not conflict with a statutory provision coercive nature, public order and decency.This principle is especially important dealing with the content of the agreement.The principle of freedom of contract is implied in Article 1338 of the Civil Code as follows: "All agreements made legally are valid as a law for those who make it.Meanwhile, the legal basis for granting credit is according to Munir Fuady (2011: 21) is as follows: 1) Agreement between the parties Article 1338 paragraph (1) of the Civil Code states that all An agreement made legally applies as law to those who make it.Likewise in the credit sector, in particular Bank credit is also initiated by an agreement which is often called a credit agreement, and is generally carried out in written form.Because it is in accordance with the provisions in Article 1338 paragraph (1) of the KUH Civil, then all the articles in a credit agreement Nababan,Silaban,Surbakti,Nasution,Siahaan 2004 legally binding on both parties, namely the creditor and debtor party.As long as there are no articles in the credit agreement which is contrary to applicable law, then the attachment is The same also applies to other supporting agreements such as debt guarantee agreements, payment implementation techniques or repayment, or other things which are usually exhibits or attachments to the relevant credit agreement 2) Law In Indonesia, special laws regulate banking is Law Number 10 of 1998 replacing Law Number 7 of 1992 concerning Banking.Activity Providing credit is a very basic activity and The very conventional nature of a bank is also confirmed by law the.Apart from the banking law, the law relating to banking is Law Number 13 of 1968 concerning the Central Bank which regulates the position and authority of Bank Indonesia as a supervisory institution in the banking sector, and including supervision in the credit sector.
3) Implementing regulations Apart from statutory regulations, it becomes: The legal basis is the implementing regulations whose level is at under the above statutory regulations.Regulations This is quite a lot due to one of the juridical characters of banking business, so banking business is a field that full of regulations.This is caused by: a) Banks are institutions that manage people's money, because the interests of many people are at stake by a bank.b) Bank activities are very detailed and complicated activities, Therefore, complete directions and instructions are needed and detailed too.c) Banks play a big role in monetary development and macro economy, therefore there is also a need community so that banks remain safe and there is no turmoil, so that national economic development remains steady.Levels of regulations in the banking sector under the statutory regulations are as follows: Usually done via interview.General information presented by the bank includes, among others procedures for applying for credit and conditions for obtaining credit facilities.From the prospective debtor, it is hoped that there will be general information regarding the condition of the business, company documents, and guarantees provided.2. Credit Analysis Stage In this stage, an in-depth assessment of the state of the business is carried out or credit applicant project.The assessment covers various aspects of generally consists of management and organizational aspects, marketing aspects, technical aspects, juridical/legal aspects, and socioeconomic aspects.

Credit Decision Stage
Based on the credit analysis report, the bank, through the credit decision maker, decides whether the credit application is worthy of being given credit or not.No. 4. Implementation and Credit Administration/Administration Stage After the prospective borrower has studied and approved the contents of the credit decision as well The bank has received and researched all credit requirements from the candidate borrower then both parties sign a credit agreement as well general conditions for granting credit.

Financial Reports
Financial reports are records of a company's financial information in an accounting period that can be used to describe performance the company.Financial reports are part of the reporting process financial According to Financial Accounting Standards issued by the Association Indonesian Accountants' objective of financial reports is to provide information regarding the financial position, performance and changes in the financial position of a company that is useful for a large number of users in making decisions.Financial reports prepared for this purpose meet the common needs of most users.However, financial reports do not provide all the information that users may need in making general economic decisions describe financial impacts and past events, and are not required to provide non-financial information.Financial reports also show what management has done (English: stewardship), or management's responsibility for the resources entrusted to it.
Users who want to see what has been done or management's accountability do so so they can make economic decisions.These decisions include, for example, the decision to hold or sell their investment in the company or the decision to reappoint or replace management.Hypothesis The graph regarding non-performing loans or bad credit starting from 2007 to 2022 provides information that BTN bank has experienced ups and downs in its bad loans.This graph shows changes in net bad credit/net NPL and gross bad credit/gross NPL which are the basic considerations in investing in banks.However, this research is focused on looking at changes in BTN bank's net bad loans.
From 2007 to 2011 in the graph it was in the range of values from 2.5 to 3 and in 2011 the net bad loans from BTN bank decreased drastically from the previous year below the value of 2.5.With this value, BTN Bank is convinced that it is good to invest.
From 2012 to 2016, there was an increase in the first 3 years, namely from 2012 to 2014, the value of net bad loans at BTN bank was in the range of more than three, while in 2015 to 2016 it decreased drastically to around 2.
In 2017 to 2022, the value of bad loans from BTN bank experienced a drastic decline, namely at a value of 1 in the first two years, namely 2017 and 2018, while in 2019 to 2020 the value of net bad loans rose to three, followed by 2021 to 2022 which showed The value is quite good, namely the value of BTN bank's net bad loans decreased to one, which illustrates that in that year the public was strongly advised to invest because the value was very low.
With the results of this research showing that the value of bad credit/nonperforming loans at Bank BTN, whether net or gross, is below 5, Bank BTN has succeeded in maintaining a value of bad credit that is not detrimental to the bank and is able to run its company well.

CONCLUSIONS AND RECOMMENDATIONS
By paying attention to the results and discussion, it can be concluded that: a. Bad credit at BTN bank influences investment decisions and becomes the right investment basis for the public and investors.b.Bad loans at BTN bank experienced irregular changes in NPL values.c.Bad credit at BTN bank is divided into two, namely net bad credit and gross bad credit d.Net bad credit can function as a factor influencing investment decisions at BTN bank So through this research it can be recommended that: a.The public can invest in a company if they know the net or gross value of bad debts.b.People can invest in BTN bank because they have bad credit or nonperforming loans below 5. c.It would be better for BTN bank to maintain its NPL value, both gross and net, at no more than 5 to maintain the bank.d.The net non-performing loan value should be below 1 to get high profits.

ADVANCED RESEARCH
The research carried out on bad credit or non-performing loans at BTN Bank was research using literature study methods and focus group discussion/FGD which had limitations in its testing because it was limited by the author's competence.If the research regarding the analysis of the influence of bad credit on investment decisions at BTN Bank were carried out in more detail using other methods to test more deeply and provide very strong evidence.
a) Government Regulations (1) PP No. 70 of 1992 concerning Commercial Banks (2) PP No. 71 of 1992 concerning Rural Banks.(3) PP No. 72 of 1992 concerning Banks Based on Sharing Principles Results.b) Regulation of the Minister of Finance c) Bank Indonesia Regulations d) Other regulations, such as Presidential Decrees or Decrees of certain Officials G. Stages of Providing Credit The stages of granting credit according to H. Rachmat Firdaus (2003:91) are as follows: 1.Credit preparation This is an initial stage activity with the aim of getting to know each other basic information between prospective debtors and the bank.