BALI - The Financial Services Authority (OJK) is targeting national credit penetration above 35 percent of gross domestic product (GDP) because there is still a lot of potential that can be explored, one of which is the micro, small and medium enterprises (MSMEs) sector.
"So, there is still a lot of room to grow for credit in Indonesia, not only talking about bank credit, but also non-bank financing," said OJK Deputy Chairman of the Board of Commissioners Mirza Adityaswara as quoted by Antara, Friday, March 17.
According to him, credit realization in Indonesia is currently estimated to only reach around 35 percent of GDP.
Based on OJK data, the realization of bank credit in December 2022 reached IDR 6,424 trillion, an increase of 11.35 percent compared to the same period in 2021 which reached IDR 5,482 trillion.
The achievement of credit realization in 2022 is estimated to be around 35 percent of the total GDP at current prices of Rp. 19,588.4 trillion, based on data from the Central Statistics Agency (BPS) in 2022.
He explained that the percentage of bank credit in the country was still lower than neighboring countries such as Thailand, which reached around 70 percent of the GDP of the white elephant country.
He believes that credit penetration support is not only contributed by the banking sector, but also non-bank loans such as financing institutions such as Pegadaian, to information financial institutions such as Micro Financial Institutions (LKM).
Mirza added that an innovative alternative credit assessment or (ICS) has the potential to become one of the information to assess prospective debtors, including MSME actors.
ICS, he continued, could be a new way in addition to credit assessment by the Conventional Credit Bureau which assesses the history of repayment of loans and debts that have not been paid off.
Especially with the digital era, information related to current trending transactions such as Buy Now Pay Then or Buy Now Pay Later (BNPL) and MSME digital activities can be part of the assessment in obtaining credit access.
"We are all in the digital era. To grow credit, information from digital activities, it can be used as this information to grow credit in Indonesia," he said.
To grow credit that meets the precautionary principle, he continued, the government has credit insurance programs including for MSMEs.
"With a large population of almost 300 million from Sabang to Merauke, that (35 percent of credit) is not enough. We have to grow more loans, not only from banks but also non-banks, not only using conventional but also digital information," he said.
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