Encouraging Credit Growth, BI Increases KLM Priority Sector

Bank Indonesia (Photo: Antara)

SAMOSIR - Bank Indonesia (BI) said it would expand the priority sector of Macroprudential Liquidity Incentive Policy (KLM) to encourage credit growth.

Head of the Financial Sector Group of the BI Macroprudential Policy Department, Nugroho Joko Prastowo, said that some of these priority sectors are the supporting sectors for downstreaming, construction and productive real estate, creative economy, automotive, electricity-Gas-Air Bersih (LGA) trading, and social services.

"Hopefully this blue credit, which is already positive and high at 12.4 percent until March, will not go down again. Because later in June, banks will get additional liquidity from incentives," Joko said in a discussion on the Latest Economic Development and BI Policy Mix Response, in Samosir Regency, North Sumatra, Sunday, April 28.

Joko said that the sector was chosen because it has the driving force in economic growth and is not at risk. As well as supporting the green economy and government programs.

According to Joko, this additional sector will start getting incentives on June 1, 2024, with an incentive amount of 4 percent. "Hopefully the bank is enthusiastic about channeling it," he said.

Joko said BI again expanded the priority sector of the Macroprudential Liquidity Incentive Policy (KLM) by increasing banking liquidity by IDR 81 trillion in mid-2024. Thus, the total incentives provided are IDR 246 trillion.

Furthermore, in line with the increasing credit growth, additional liquidity from KLM is predicted to reach IDR 115 trillion by the end of 2024, bringing the total incentives provided to IDR 280 trillion.