Good News From BI, Credit Growth This Year Is Believed To Reach Double Digits

JAKARTA - Bank Indonesia (BI) stated that the banking intermediation function throughout 2022 is expected to improve.

BI Governor Perry Warjiyo said the smooth intermediation was mainly in productive loans, namely working capital loans and investment loans, as well as in most economic sectors.

"With regard to developments and efforts made, credit growth in 2022 is estimated to be higher than previous forecasts, to be in the range of 9.0 percent to 11.0 percent on an annual basis (year on year/yoy) with adequate banking liquidity being maintained,” he said, quoted on Friday, July 22.

Perry explained that from the supply side, banking lending standards remained loose, especially in the industrial, trade and agricultural sectors in line with the improving perception of credit risk.

On the demand side, the recovery in corporate performance continues, as reflected in improved sales, especially in the trade and industrial sectors.

"This performance improvement increases the ability to pay and capital expenditures for corporations, as well as increase the demand for funding from corporations," he said.

Meanwhile, MSME loan growth also increased by 17.37 percent (yoy) in June 2022.

Perry also explained that the banking capital adequacy ratio (CAR) in May 2022 remained high at 24.67 percent, and the ratio of non-performing loans (NPL) was maintained at 3.04 percent (gross) and 0.85 percent (net).

In June 2022, third party funds (TPF) grew by 9.13 percent (yoy), while banking intermediation continued to improve with credit growth of 10.66 percent (yoy).

"In an effort to accelerate the intermediation recovery in order to strengthen the momentum of economic recovery, Bank Indonesia continues to encourage banks to increase lending to priority and inclusive sectors, as well as strengthen synergies with the government, other authorities and the business world," concluded Perry.