Duh! Banking Credit Only Grows 5 Percent If This Scenario Occurs

Illustration. (Photo: Bank Indonesia)

JAKARTA - The Financial Services Authority (OJK) estimates that the national banking credit growth rate can only rise to a level of 5 percent in 2021 if a number of bad scenarios occur.

Chief Executive of the OJK Banking Supervision Heru Kristiyana said the main key in supporting credit growth is how to manage the impact of the pandemic so that it does not affect bank business activities too far.

"If the vaccination process is slow, then the pandemic transmission rate continues without braking, and the demand itself is still weak, then this could be corrected to 5 percent," he said in a virtual interview, Thursday, February 11.

Heru added, another warning sign that can be observed is how the national economy is increasing. He estimates that if the new macro growth rate occurs in the second semester of 2021, it will be very difficult to be able to achieve the loan jump target of up to 7 to 9 percent this year.

Furthermore, Heru explained that the banking intermediary function could be boosted to the maximum level if it received support from various related parties. For example, he said that if the policy of easing liquidity from the central bank was continued and government support through fiscal, the 5 percent level could be passed before the closing of this year's book.

"If the election can take place in the first quarter of 2021, I am sure that bank credit growth can reach 7 percent or even 9 percent," he said.

For your information, OJK officially announced that the intermediation target in 2021 is 7.5 percent plus minus 1 percent. This figure is quite aggressive when referring to the 2020 realization which was known to have contracted by minus 2.41 percent.

Meanwhile, the average credit growth projection stated in the bank's business plan (RBB) is 7.13 percent. Meanwhile, Bank Indonesia predicts that growth could reach 7 to 9 percent.