Legal Mechanism for Risk Mitigation

Oct 13, 2025 by wbrum.org 121 views

Juridical Analysis of the Practice of Borrowing and Borrowing Money Without Guarantee in Horas Traditional Market, Pematang Siantar City

Introduction

The traditional market of Horas in Pematang Siantar City has a unique practice of borrowing money without guarantees, where traders often receive unsecured loans with installment payments. This practice has raised concerns about the potential risks and legal problems that may arise for both debtors and creditors. This article aims to provide a juridical analysis of the practice of borrowing and borrowing money without guarantees in the traditional market of Horas, as well as discussing legal solutions and protection for both parties.

Unsecured Borrowing and Borrowing Agreement: Practical Solutions or Time Bombs?

The practice of borrowing unsecured in the traditional market of Horas can be categorized as "loan use" as regulated in Article 1754 and Article 1765 of the Civil Code (KUHPERDATA). This does not conflict with Article 46 paragraph 1 of the banking law. Although practical, this system holds risks for creditors, because they are without guarantee, they are vulnerable to losses if the debtor fails to pay off loans. The lack of guarantees in unsecured borrowing agreements can lead to a situation where creditors are left with no recourse if the debtor defaults on payments.

Legal Mechanism for Risk Mitigation

To minimize risk, both debtors and creditors can utilize several legal mechanisms:

The Default Lawsuit:

If the debtor does not fulfill the obligation to pay after being reminded, the creditor can file a default lawsuit to court based on Article 1243 of the Civil Code. In this lawsuit, creditors can demand compensation, interest, and costs incurred due to default. This legal mechanism provides a clear and structured process for creditors to recover their losses in the event of a default.

Application for Relief:

Debtors can apply for interest relief or add a loan return period to creditors. If rejected, the debtor can submit the request to the court based on "Woeker-Ordinantie 1938", which regulates the misuse of rights in credit. This legal mechanism provides debtors with a means to negotiate with creditors and potentially reduce the burden of loan repayments.

Legal Protection for Debtors:

If the debtor experiences a crime of unpleasant or extortion in the process of billing by creditors, they can report creditors based on Article 335 paragraph 1 and Article 368 of the Criminal Code (KUHP). This legal mechanism provides debtors with protection against unfair or coercive practices by creditors.

The Need for Special Regulations

Seeing the complexity of the problems that arise, special regulations are needed to regulate the practice of borrowing money between individuals, especially in traditional markets. This regulation must pay attention to the legal and economic balance between the debtor and the creditor, and not conflict with the applicable laws and regulations. Special regulations can provide a clear and standardized framework for borrowing and lending agreements, reducing the risk of disputes and legal problems.

Suggestions and Recommendations

Creditors:

Maintaining a balance in borrowing loan agreements, taking into account the ability of debtors to pay off loans. Creditors should ensure that the loan terms are fair and reasonable, and that the debtor has the capacity to repay the loan.

Debtor:

Before borrowing, carefully consider the amount of money to be borrowed, and make sure the benefits to be obtained from the business can cover the loan installments. Debtors should also ensure that they have a clear understanding of the loan terms and conditions.

Government:

Encouraging the creation of micro financial institutions that can provide loan access with low interest and flexible payment schemes for traders in traditional markets. This can help to reduce the risk of default and provide a more sustainable solution for both debtors and creditors.

Conclusion

By applying the right legal mechanism and encouraging the creation of special regulations, the practice of borrowing borrowing money without guarantees in the traditional market of Horas can be a safe and sustainable solution for both parties. It is essential to strike a balance between the interests of debtors and creditors, and to provide a clear and standardized framework for borrowing and lending agreements. By doing so, we can reduce the risk of disputes and legal problems, and promote a more stable and prosperous traditional market.

Recommendations for Future Research

Conduct a comprehensive study on the impact of special regulations on the practice of borrowing and lending in traditional markets.
Investigate the effectiveness of micro financial institutions in providing loan access with low interest and flexible payment schemes for traders in traditional markets.
Analyze the role of government in regulating the practice of borrowing and lending in traditional markets, and identify areas for improvement.

Limitations of the Study

The study is limited to the traditional market of Horas in Pematang Siantar City, and may not be generalizable to other traditional markets.
The study relies on secondary data and may not capture the full complexity of the issues involved.
The study does not provide a comprehensive analysis of the legal mechanisms available to debtors and creditors.

Future Directions

Conduct a comparative study of the practice of borrowing and lending in different traditional markets.
Investigate the impact of digital technologies on the practice of borrowing and lending in traditional markets.
Develop a comprehensive framework for regulating the practice of borrowing and lending in traditional markets.
Frequently Asked Questions (FAQs) about the Practice of Borrowing and Borrowing Money Without Guarantee in Horas Traditional Market, Pematang Siantar City

Q: What is the practice of borrowing and borrowing money without guarantee in Horas Traditional Market, Pematang Siantar City?

A: The practice of borrowing and borrowing money without guarantee in Horas Traditional Market, Pematang Siantar City refers to the common practice of traders borrowing money from each other without providing any collateral or guarantee. This practice is often referred to as "loan use" and is regulated by Article 1754 and Article 1765 of the Civil Code (KUHPERDATA).

Q: What are the risks associated with borrowing and borrowing money without guarantee?

A: The risks associated with borrowing and borrowing money without guarantee include the risk of default, where the debtor fails to pay off the loan, and the risk of loss for the creditor, who may not be able to recover their investment.

Q: What are the legal mechanisms available to debtors and creditors in the event of a default?

A: The legal mechanisms available to debtors and creditors in the event of a default include the default lawsuit, application for relief, and legal protection for debtors. These mechanisms provide a clear and structured process for creditors to recover their losses in the event of a default, and for debtors to negotiate with creditors and potentially reduce the burden of loan repayments.

Q: What is the role of government in regulating the practice of borrowing and lending in traditional markets?

A: The government plays a crucial role in regulating the practice of borrowing and lending in traditional markets by providing a clear and standardized framework for borrowing and lending agreements, and by ensuring that the interests of both debtors and creditors are protected.

Q: What are the benefits of creating special regulations to regulate the practice of borrowing and lending in traditional markets?

A: The benefits of creating special regulations to regulate the practice of borrowing and lending in traditional markets include reducing the risk of disputes and legal problems, promoting a more stable and prosperous traditional market, and providing a clear and standardized framework for borrowing and lending agreements.

Q: What are the recommendations for future research on the practice of borrowing and lending in traditional markets?

A: The recommendations for future research on the practice of borrowing and lending in traditional markets include conducting a comprehensive study on the impact of special regulations on the practice of borrowing and lending, investigating the effectiveness of micro financial institutions in providing loan access with low interest and flexible payment schemes, and analyzing the role of government in regulating the practice of borrowing and lending in traditional markets.

Q: What are the limitations of the study on the practice of borrowing and lending in traditional markets?

A: The limitations of the study on the practice of borrowing and lending in traditional markets include the study being limited to the traditional market of Horas in Pematang Siantar City, relying on secondary data, and not providing a comprehensive analysis of the legal mechanisms available to debtors and creditors.

Q: What are the future directions for research on the practice of borrowing and lending in traditional markets?

A: The future directions for research on the practice of borrowing and lending in traditional markets include conducting a comparative study of the practice of borrowing and lending in different traditional markets, investigating the impact of digital technologies on the practice of borrowing and lending in traditional markets, and developing a comprehensive framework for regulating the practice of borrowing and lending in traditional markets.

Q: What are the implications of the study on the practice of borrowing and lending in traditional markets?

A: The implications of the study on the practice of borrowing and lending in traditional markets include the need for special regulations to regulate the practice of borrowing and lending, the importance of striking a balance between the interests of debtors and creditors, and the need for a clear and standardized framework for borrowing and lending agreements.

Q: What are the recommendations for policymakers and regulators on the practice of borrowing and lending in traditional markets?

A: The recommendations for policymakers and regulators on the practice of borrowing and lending in traditional markets include creating special regulations to regulate the practice of borrowing and lending, providing a clear and standardized framework for borrowing and lending agreements, and ensuring that the interests of both debtors and creditors are protected.

Q: What are the recommendations for traders and entrepreneurs on the practice of borrowing and lending in traditional markets?

A: The recommendations for traders and entrepreneurs on the practice of borrowing and lending in traditional markets include being aware of the risks associated with borrowing and lending, negotiating fair and reasonable loan terms, and ensuring that they have a clear understanding of the loan terms and conditions.