Banking Credit Reaches IDR 7,478.4 Trillion In June 2024

Rupiah (Photo: Antara)

JAKARTA - Banking loans grew 12.36 percent on an annual basis (yoy) to IDR 7,478.4 trillion as of June 2024. Meanwhile, monthly bank lending reached IDR 102.29 trillion or grew 1.39 percent (mtm).

"On an annual basis, credit continued to achieve double-digit growth by 12.36 percent year-on-year to IDR 7,478.4 trillion. MSME loans are also still growing by 5.68 percent year-on-year in June 2024, although growth is recognized as slower than non-MSME credit growth," said OJK Banking Supervision Chief Executive Dian Ediana Rae quoting Antara.

Dian said that the increase in bank credit was also followed by maintained credit quality with a net non-performing loan ratio of 0.78 percent. Meanwhile, gross NPL was recorded at 2.26 percent.

He assessed that the quality of lending, which is still in the healthy category, was due to the policy of restructuring credit affected by COVID-19.

Indonesia is also the country that has finally stopped the credit restructuring policy.

"This policy has proven to be effective and useful in mitigating the excessive increase in NPL and has been completely stopped on March 31, 2024, and then along with the continuing recovery of the domestic economy," he said.

Furthermore, Dian explained that the restructuring credit also experienced a decrease in loan at risk (LAR) by 10.75 percent in May 2024, a decrease compared to the same period the previous year of 13.38 percent. "At the end of 2024, LAR is projected to return to single digits as LAR before the COVID-19 pandemic," said Dian.

In addition, OJK has anticipated the potential increase in bank credit risk by establishing adequate reserves and strict supervision of disbursed loans.

OJK noted that the ratio of Value Reduction Reserves (CKPN) to total restructuring loans was 60.64 percent in June 2024.

"This indicates that banks are always vigilant and anticipate the potential for worsening of the quality of credit which is restructured in line with the end of the easing of the stimulus," said Dian.