Boss Himbara Challenges Banks To Distribute Rp1,000 Trillion Credit This Year, Are You Sure You Can?

Chairman of Himbara as well as President Director of BRI Sunarso gave a statement regarding the performance of state-owned banks. (Photo: By courtesy)

JAKARTA - Chairman of the Association of State-Owned Banks (Himbara) Sunarso encourages banking businesses in the country to be able to channel loans of at least IDR 1,000 trillion throughout 2021 to be able to contribute to economic elections.

"But the problem now is how to grow this demand for credit? Given that various efforts have been made by stakeholders, by regulators, by the government (but the credit rate has not yet grown significantly), ”said the banker who is also listed as the President Director of BRI in a webinar, Thursday, February 4.

Sunarso noted that Bank Indonesia, as the monetary authority, even continued to provide support by gradually lowering the benchmark interest rate to the level of 3.5 percent.

"We then transmitted this through cutting interest rates at BRI by 350 basis points on February 28 with the scenario that credit could increase," he said.

Another challenge, according to Sunarso, is whether the rate cut can really boost credit.

"It turns out that based on the data we have collected, a decrease in loan interest does not automatically increase demand," he added.

For example, when the People's Business Credit (KUR) was rolled out around 2015, the interest charged to customers was 22 percent. At that time, the growth of KUR reached double digits, even touching the level of 22 percent to 25 percent.

Having received a good response from the public, the government in the following years provided a stimulus by cutting the interest rate to 15 percent. Not only that, the state then subsidizes 5 percent interest costs, so customers only need to pay 7 percent interest.

"But what happened? KUR growth is only single digits, and can only be double digits in 2018 only. Therefore, lowering interest rates is not the only way to increase demand for credit, "he said.

Meanwhile, according to Sunarso, the most effective way is to maintain or even increase people's purchasing power and consumption.

"Another analysis we mention is that the key to increasing credit is the purchasing power and household consumption. Now, how can you raise these two things? The most relevant thing is to provide jobs to the people so that they have an income, ”he explained.

For this reason, he supports the government's steps which intend to resume the construction of a number of infrastructure projects that were hampered by the impact of the pandemic. The reason is, the cultivation of various infrastructure facilities can be a separate solution in creating jobs.

For information, the Financial Services Authority (OJK) officially announced that the intermediation target in 2021 is 7.5 percent plus minus 1 percent. This figure is quite aggressive when we refer to the 2020 realization which was known to have contracted by minus 2.41 percent.

Meanwhile, the average credit growth projection stated in the bank's business plan (RBB) is 7.13 percent. Meanwhile, Bank Indonesia predicts that growth could reach 7 to 9 percent.