OJK Super Optimistic, Predicts 7.5 Percent Credit Growth In 2021

Illustration of rupiah currency. (Photo: Doc. Antara)

JAKARTA - The Financial Services Authority (OJK) predicts that bank credit growth in 2021 could reach 7.5 percent with a plus-minus of 1 percent.

OJK Chief Executive Officer Heru Kristiyana said the optimistic projection was determined after studying all the bank business plans (RBB) of industry players reported to the authorities.

"We see that the projected credit growth this year will run positively," he said virtually, Thursday, February 11.

Heru added that a more conducive situation is expected to last this year compared to 2020.

This is because the OJK together with the Ministry of Finance and Bank Indonesia are said to have strengthened macro stability in order to accelerate the process of economic recovery. So it is expected to raise demand for credit in line with the activity of production and consumption this year.

"In this banking sector, we support the movement of economic growth through lending," he said.

On this occasion, Heru emphasized that the growth target set by the OJK was moderate and not far from Bank Indonesia's estimates.

For information, the monetary authority predicts that the intermediation function can increase in 2021 with a level range of 7 percent to 9 percent. Meanwhile, the average credit expansion of all business actors listed in the RBB stands at 7.13 percent.

"From these three assumptions, we see that all parties believe that this year's business trip will be better," he said.

To note, the OJK revealed that banking credit growth in 2020 contracted minus 2.41 percent.

In its report, the institution headed by Wimboh Santoso explained that the drop in credit was greatly influenced by a decrease in the debit balance of large corporations, which was caused by not yet optimal production capacity due to weak demand.

Then it was also mentioned that several corporations had policies to reduce the debit balance of loans in order to reduce interest expenses.