JAKARTA - The Financial Services Authority (OJK) views that the transmission of monetary policy is getting better and the push for household spending ahead of Christmas and New Year will boost consumption credit performance until the end of 2025 and early 2026.
In addition, the trend of lowering loan interest rates and accelerating private spending can also encourage credit growth in the same period.
OJK Banking Supervision Chief Executive Dian Ediana Rae in a written answer in Jakarta, Monday, November 24, assessed that consumption credit is still growing even though it is moderated.
This is in line with the growth of gross domestic product (GDP) sourced from household consumption and indicators related to limited consumer purchasing power.
As of September 2025, consumption credit grew by around 7.42 percent year on year (yoy). OJK noted that credit risk increased slightly in the consumption segment in that period, as reflected in the non-performing loan (NPL) ratio which increased to 2.37 percent compared to September 2024's position of 1.85 percent.
"OJK emphasizes that the recovery of consumption credit depends on improving domestic demand, transmitting interest rates to lending rates, and improving household income that can affect people's purchasing power," said Dian, quoted by Antara.
According to OJK records, the most obvious slowdown occurred in home ownership loans (KPR) and motor vehicle loans (KKB).
KPR grew thermoderated in September 2025 by 7.26 percent compared to the position in September 2024 of 10.89 percent. Meanwhile, the KKB in September 2025 grew by 0.72 percent compared to the position in September 2024 of 9.00 percent, thus contributing to curbing the growth rate of consumption credit.
"The weakness of KKB growth is also in line with the contraction in motor vehicle sales over the past year," said Dian.
However, Dian added, there was a rapid growth in the buy now pay later (BNPL) segment by 25.49 percent to Rp24.86 trillion, although the portion of BNPL to total banking loans was still relatively small with a maintained NPL ratio of 2.61 percent.
As a whole, credit in September 2025 grew by 7.70 percent yoy, an increase compared to the previous month of 7.56 percent. Total outstanding loans in this period reached IDR 8,162.8 trillion.
Based on the type of use, consumption credit growth occupies the second highest position. Investment credit recorded the highest growth of 15.18 percent yoy, while working capital credit grew moderately 3.37 percent yoy.
OJK noted that the Bank Indonesia (BI-Rate) benchmark interest rate has been responded to in stages by the banking sector through adjustment of credit interest rates and third party funds (DPK).
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On an annual basis, there was a decrease in the average interest rate of rupiah credit, each by 50 bps for investment credit (September 2025: 8.25 percent; September 2024: 8.75 percent) and 41 bps for working capital credit (September 2025: 8.46 percent; September 2024: 8.87 percent).
The decline in the BI-Rate generally tends to be followed by a decrease in lending rates even with a certain time lag, along with the process of transmitting monetary policy.
The credit interest rate is expected to still have room to continue the decline in response to the BI-Rate decline by 2025, especially if global interest rates also drop.
With the expectations of a global interest rate reduction in the fourth quarter of 2025, the OJK considers that there is still room for further interest rates reduction, although its implementation will rely heavily on the respective banks' strategies and the cost structure it has, especially related to the cost of funds (cost of fund/CoF).
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