Banking Credit Grows Slow In March 2025

JAKARTA - Bank Indonesia (BI) revealed that credit in April 2025 grew by 8.88 percent (yoy), lower than 9.16 percent (yoy) in March 2025.

Bank Indonesia Governor Perry Warjiyo conveyed that in terms of supply, interest in lending standards is still good, especially in the agriculture, electricity, gas and water (LGA) sectors, as well as social services.

"The banking liquidity condition in general is still adequate, but the growth of Third Party Funds (DPK) tends to slow down from 5.51 percent (yoy) in early January 2025 to 4.55 percent (yoy) in April 2025," Perry said at a press conference, Wednesday, May 21.

According to him, this condition encourages competition in interbank funding and the need to expand other funding sources outside the DPK.

Meanwhile, in terms of demand, credit growth is mainly contributed by the industrial sector, transportation, and social services, while the contribution of credit growth in the construction and trade sectors as well as other sectors is still limited.

As for the use group, working capital credit growth, investment credit, and consumption credit, each amounted to 4.62 percent (yoy), 15.86 percent (yoy), and 8.97 percent (yoy).

Meanwhile, sharia financing grew by 8.85 percent (yoy), while MSME loans grew by 2.60 percent (yoy).

Perry said that with the development of credit until April 2025, Bank Indonesia predicts that bank credit growth in 2025 will be in the range of 8 percent 11 percent.

"In the future, various efforts need to be encouraged to increase lending, both by lowering interest rates and expanding banking sources and increasing demand from the real sector, so that it can increase higher economic growth," he explained.

Perry said that Bank Indonesia will continue to strengthen accommodative macroprudential policies to encourage higher credit growth, including optimizing the Bank Overseas Funding Ratio (RPLN), Supporting Macroprudential Liquidity (PLM), and Macroprudential Liquidity Incentive Policy (KLM).

According to him, bank resilience remains strong in supporting financial system stability and adequate banking liquidity conditions, capital is still high, and credit risk is low.

Meanwhile, banking liquidity is adequate, as reflected in the stable ratio of Liquid Equipment to Third Party Funds (AL/DPK) of 25.23 percent in April 2025.

Meanwhile, in terms of capital, the banking capital adequacy ratio (CAR) in March 2025 was 25.38 percent so that it was still able to absorb risks.

Meanwhile, the ratio of non-performing loans (NPL) for banks was recorded as low, at 2.17 percent (gross) and 0.80 percent (neto) in March 2025.

He conveyed that the results of the Bank Indonesia stress test also showed that banking resilience remained strong, and was supported by the ability to pay and maintain corporate profitability.

"In the future, Bank Indonesia will continue to strengthen policy synergies with KSSK in mitigating various global and domestic economic risks that have the potential to disrupt financial system stability," he explained.