OJK Says Credit Growth Target Of 11 Percent Can Be Achieved

Rupiah (Photo: Antara)

JAKARTA - The Financial Services Authority (OJK) believes that the 2024 credit growth target of 9-11 percent can be achieved supported by a good banking intermediation function.

OJK Banking Supervision Chief Executive Dian Ediana Rae said the credit growth target set by OJK at the beginning of the year in the 9-11 percent range was still seen as in accordance with the projected and RBB (bank business plan) targets submitted by the bank.

"As well as in line with the banking intermediation function that has been going well so far," said Dian quoting Antara.

Dian said that the projected credit growth is expected to be achieved as seen from the impasse-bursed loan which increased by 10.60 percent from the previous year which means that banks have allocated plans for future lending.

"In general, banks are still optimistic about the projected lending in 2024 which is in line with the achievement or realization of credit growth in April 2024 with the NPL trend which will decrease until the end of the year," he said.

As for micro, small and medium enterprises (MSMEs), credit to MSMEs has the potential to increase with a "committed issued loan" which rose 4.32 percent from the previous year.

Credit disbursement to MSMEs is believed to be a driving force for the economy due to the high absorption of labor in the MSME sector.

OJK coordinates with other authorities such as Bank Indonesia as well as ministries and provincial governments, related district governments to continue to encourage MSME credit growth.

"It should be noted that the distribution of MSME loans must be accompanied by improved risk management considering the relatively high risk compared to other loans," he said.

Non-performing loans (NPL) for MSME loans were recorded at 4.26 percent in April 2024, higher than the aggregate banking NPL ratio.

However, banks have also anticipated this risk with a fairly high reserves where the coverage of MSME CKPN for total MSME NPL loans reached 137.37 percent.