Sigmaphi Criticizes The Minister Of Finance's Plan: The Problem Is In Credit Demand, Not Liquidity

Executive Director of Sigmaphi Indonesia, Muhammad Islam. (Photo: Special)

JAKARTA Executive Director of Sigmaphi Indonesia, Muhammad Islam, assessed that the plan of the Minister of Finance Purbaya Yudhi Sadive to transfer Rp200 trillion of government funds from Bank Indonesia to state-owned banks (Himbara) has the potential to mistarget.

According to him, the main obstacle for lending is not to lie in liquidity, but to weak demand for credit in the real sector.

"The problem is not the dryness of liquidity in the financial market, but the weak prospect of domestic sales and people's purchasing power. So, increasing banking liquidity does not automatically encourage credit," said Islam in Jakarta, Friday, September 12.

Based on OJK data as of June 2025, the bank's loan to deposit ratio (LDR) was at 86.5 percent, down from 88.3 percent in the previous month.

This shows banks still have room to channel credit, but low demand is a major obstacle.

Islam also highlighted the amount of funds being transferred. The value of Rp. 200 trillion, according to him, is only equivalent to 4.73 percent of Himbara's total third party funds (DPK) which reached Rp. 4,228.32 trillion, or about 2.14 percent of the DPK of national banking.

With the smallest proportion, the impact on lending is not expected to be significant.

"The risk is that the funds are parked back into safe instruments such as Government Securities (SBN), instead of flowing into the real sector," he said.

He also encouraged the government to be more transparent about the purpose of the policy. If in fact it aims to support APBN financing, said Islam, the more appropriate mechanism is through the Budget Balance (SAL) or the Remaining Budget Financing (SiLPA) with the approval of the DPR.

"If it is rotated through banking, it will increase the government's cost of funds," he added.

The plan of the Minister of Finance Purbaya itself is intended to accelerate lending in order to move the real sector and encourage national economic growth.

The government hopes that the Rp200 trillion fund transferred to Himbara will become additional ammunition for state-owned banks to channel loans to priority sectors.

However, according to Islam, the supply creatings its own demand-based approach is difficult to walk in the current conditions.

The business world will only apply for credit if sales prospects are promising, while people's weak purchasing power, high risk perceptions, and strict banking requirements keep lending low.

"As a result, policies to increase the supply of funds in banks do not always answer the core problem of weak credit demand," he concluded.