Credit Growth Returns To Level Two Digit To 9.39 Percent

JAKARTA The monetary authority of Bank Indonesia (BI) reported that credit growth at the end of May 2023 was 9.39 percent year on year (yoy).

BI Governor Perry Warjiyo said that this figure was higher than the April 2023 book which was 8.08 percent.

"Credits and banking financing have increased again so as to support efforts to strengthen economic growth," he said at a press conference after the Board of Governors' Meeting (RDG) in Jakarta on Thursday, June 22.

According to Perry, increased intermediation occurred in all types of credit in most economic sectors, such as the business services sector, mining, industry, and social services.

"Credit growth is driven by increased demand in line with the high-growing corporate performance and the availability of liquidity and lax banking credit/financing distribution standards," he said.

Perry added that Islamic financing also grew high to 19.45 percent yoy in May 2023. In the MSME segment, credit growth continued, reaching 7.61 percent last month supported by the realization of the distribution of People's Business Credit (KUR) of IDR 80.25 trillion.

"To encourage further credit and financing growth, Bank Indonesia will increase its macroprudential policy stimulus through increasing and sharpening liquidity incentives to lending/financing banks in downstream sectors (mining, agriculture, plantations, and fisheries), housing, tourism, as well as increasing financial inclusion (MSMEs and KUR) and green economy-financing," he stressed.

For information, credit growth was comfortable at double digits in mid-2022 due to the low base line from 2021 due to the COVID-19 pandemic.