Sri Mulyani Reveals Which Sectors Are Banks Refused To Enter To Provide Credit, Why?

JAKARTA - Minister of Finance, Sri Mulyani, said that banking service institutions have an important role in encouraging national economic recovery through optimizing the intermediation function.

However, the tendency of banks to choose certain industrial sectors is a separate consideration given that the impacts caused by COVID-19 are quite different.

"Banks will avoid industry groups that are slow starters, such as trade, construction, transportation, and services", she said while attending a Working Meeting with Commission XI of the Indonesian House of Representatives at the Senayan Parliament Complex, Jakarta.

According to the Minister of Finance, the slow starter group is the industry segment most affected by COVID-19 and has a long recovery process.

“In this industry group, when COVID-19 hit early last year they went down very fast. Then when the number of COVID-19 went up they also went down the first and very quickly. However, when the daily cases are under control and down they can go up but the recovery is slow and if you look at the curve picture, it is not symmetrical between the decline and also the recovery time", she said.

This assumption is based on the initial case of the pandemic in March 2020 which made the slow starter contract the deepest. Although signs of recovery are already visible, the growth rate contributed by the cs services sector is still in the minus two digits range.

Meanwhile, the sector that is safer for banks to enter according to the Minister of Finance is the manufacturing industry sector which he calls the growth driver.

"The growth driver sector has also been equally affected by the pandemic and its deep contraction. But they can recover relatively quickly. This can be seen from production activities that continue to increase”, she explained.

Therefore, through the Ministry of Finance, the government, together with Bank Indonesia as the monetary authority, and the Financial Services Authority (OJK) as the regulator of the financial industry, are trying to find solutions to the current situation.

“Now this is a challenge for the government's economic recovery to find a way out, namely what must be formulated in terms of fiscal regulations, as well as from the monetary side of Bank Indonesia, as well as OJK. Because the state also cannot continue to use the state budget to reduce the impact of the pandemic", she concluded.