Entrepreneurs Choose Wait And See, Banking Loans So Slow

JAKARTA Governor of Bank Indonesia (BI) Perry Warjiyo confirmed that bank credit and financing grew slowly due to declining demand for credit from the business world.

According to him, in the midst of loose supply sides by the availability of liquidity, high credit disbursement plans, and lax bank lending/financing standards, corporations tend to accelerate credit repayment.

"This is also influenced by the behavior of business actors to wait and see in increasing their investment plans in the future," he said on Tuesday, July 25.

Perry explained that bank credit in June 2023 grew by 7.76 percent year on year (yoy), mainly supported by the business services, social services, and mining sectors. It was stated that Islamic financing also grew high to reach 17.09 percent (yoy) in June 2023.

"In the MSME segment, credit growth continues, reaching 7.34 percent year on year in June 2023," he said.

Perry ensured that Bank Indonesia was committed to continuing to encourage lending/financing in terms of banking offerings in order to accelerate sustainable economic growth.

For this reason, he continued, the macroprudential liquidity incentive policy is focused on sectors that have higher leverage for economic growth and job creation, especially in the downstream sector (minerba, agriculture, livestock, and fisheries), housing (including public housing), tourism, inclusive (including MSMEs, KUR, and ultra micro/UMi), as well as the green finance economy.

"Bank Indonesia estimates credit growth in 2023 in the range of 9 percent to 11 percent year on year," concluded Perry.