Bad News From Bank Indonesia: Slowing Corporate Loans, Decreased Activity And Investment Delays Are Causes

JAKARTA - Bank Indonesia (BI) said that there was a slowdown in financing (credit) growth in the corporate sector in the period July 2021 to June 2021.

Head of the Communications Department Erwin Haryono said this condition was reflected in a Weighted Net Balance (WBT) of 1.8 percent in July 2021 compared to June 2021 of 12.8 percent. In his notes, the decline occurred in the agricultural sector, processing industry and trade.

"A number of sectors are indicated to be slowing down in line with the decline in operational activities and the postponement of a number of investment plans," he said as reported by the official website, Monday, August 16.

Meanwhile, financing needs are indicated to increase in the transportation and warehousing segments, health services and other services, especially to support operational activities, post-new normal recovery and pay obligations that are due which increased compared to the previous month.

"Fulfillment of financing needs mainly still comes from own funds, domestic bank loans and loans from the parent company," he continued.

Erwin added that additional requests for financing made by households in July 2021 were still limited.

"Commercial banks are still the main source of preference for additional household financing, with the majority of the proposed types of financing in the form of multipurpose loans and motor vehicle loans," he said.

Based on bank group, new loan disbursement growth in July 2021 is estimated to occur in all bank categories.

"Meanwhile, for the entire period of the third quarter of 2021, new credit distribution is estimated to grow compared to the previous quarter, as indicated by the WNB estimate of new credit disbursement of 63.1 percent," Erwin concluded.