BI Reveals Corporate Financing Needs Soared In December 2023

Rupiah illustration (Photo: dock. Antara)

JAKARTA - Bank Indonesia (BI) recorded an increase in corporate financing needs in December 2023.

Based on data from the Banking Financing Demand and Offer Survey released by Bank Indonesia (BI), corporate financing needs are indicated to grow. This is reflected in the weighted net balance (SBT) of corporate financing of 18.4 percent, an increase compared to SBT 14.9 percent in November 2023.

Executive Director of the BI Communication Department Erwin Haryono said the increase in corporate financing needs was mainly driven by increased demand in the manufacturing industry sector, the trade sector, and the repair sector of cars and motorcycles.

Erwin conveyed that the increase in corporate financing needs was mainly used to support operational activities and pay due obligations.

"The sources of corporate financing mainly come from their own funds, followed by the use of leniency facilities for withdrawals and financing from domestic banks," he explained in his statement, Friday, January 19.

Respondents said that the financing needs for the reporting period were still met, especially from the own funds of 68.1 percent, followed by the use of 9.2 percent of the withdrawal concession facilities, and 7.6 percent of financing from domestic banking, the third increase compared to November 2023.

Meanwhile, financing originating from loans/debts from the parent company of 3.4 percent is indicated to decrease compared to November 2023 of 6.5 percent.

Respondents conveyed that the reason for selecting sources of financing was mainly still influenced by aspects of ease and speed of obtaining 81.5 percent of funds and lower interest rates of 11.8 percent.

On the other hand, the need for corporate financing for the next three months in March 2024 is estimated to remain strong with an SBT of 22.1 percent, although lower than the previous period with an SBT of 27.3 percent.

The increase in financing needs is expected to occur at the LU Industry processing pad. The growth in corporate financing is mainly used to support 83.2 percent of operational activities and 26.7 percent of investment.

Furthermore, respondents said that meeting the needs of the next 3 months, the majority of the funds were still met from 76.3 percent higher than the previous month's 74.0 percent, followed by financing that came from loans/debts from the parent company 19.8 percent, the use of concession facilities for withdrawal 17.6 percent, and the application for new credit to domestic banks by 16.0 percent, the third increased compared to the previous month.

Erwin said that the distribution of new loans by banks in December 2023 was also indicated to increase with an SBT of 73.3 percent, higher than the SBT in the previous month of 70.4 percent.

Meanwhile, the main factors that affect the distribution of new loans include requests for financing from customers, prospects for monetary and economic conditions in the future, as well as levels of business competition from other banks.

Meanwhile, for the whole fourth quarter of 2023, offers for new credit distribution from banks are also predicted to continue to grow.

On the household side, the demand for new financing in December 2023 is indicated to continue to grow compared to the previous month, with the majority of financing coming from commercial banks.

In addition to banking, sources of financing that are household preferences include cooperatives and leasing.