Credit Starts To Stretch, OJK Claims The Financial Services Sector Is Still Awake

Illustration (Photo: Doc. Antara)

JAKARTA - The Financial Services Authority (OJK) assesses that the financial services sector until April 2021 is still maintained with indicators of available capital and liquidity and controlled credit risk.

OJK Deputy Commissioner for Strategic Management and Logistics Anto Prabowo assesses that the global economic recovery will continue in line with the recovery of economic activity in the world's major economies.

“From the domestic side, economic indicators such as the household and corporate sectors indicate improvement. Population mobility in the second quarter of 2021 will increase significantly, which is expected to accelerate economic recovery," he said in a press statement, Sunday, May 30.

According to Anto, OJK continues to maintain a stable financial services sector in the midst of efforts to recover the national economy by always synergizing with stakeholders in issuing various policies.

"OJK also coordinates with local governments by issuing policies that help accelerate economic recovery and encourage new alternative economic potentials in accordance with the advantages of each region," he said.

Based on data released by the authorities, credit growth in April still contracted by 2.28 percent year-on-year (yoy).

However, consumption credit started to grow positively by 0.31 percent yoy in line with the increasing proportion of consumption spending, mainly driven by housing loans (KPR).

Tourism sector credit also grew by 5.99 percent, supported by an increase in loans to restaurants/restaurants 10.53 percent month-to-month (mtm) and the domestic navy 1.24 percent yoy.

In year-to-date (ytd) credit growth is still positive, mainly driven by lending from state-owned banks and regional development banks. MSME loans are also starting to show improvement. From this trend, credit growth in the first quarter of 2021 is better than 2020, so there is still room for growth.

Furthermore, OJK stated that interest rates are not the only determining factor for the growth of bank credit, because credit growth is largely determined by public demand.

“Demand for credit and financing will be high again if there is an increase in community mobility that adheres to health protocols. This is supported by increasingly widespread vaccination efforts to increase immunity and maintain good public health," concluded Anto.