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Sunday, April 11, 2021
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Loan growth has rebounded: Indonesia’s central bank

There were signs that banks have started to lend more to clients and that loan growth may have rebounded in October from its lowest level since 2009, a senior official said on Saturday

Juda Agung, Bank Indonesia’s (BI) executive director of economic and monetary policy, said based on commercial banks’ daily reports to regulators, loan growth may have rebounded to 7.5 per cent in October and could accelerate to 8.3 per cent in November.

The latest banking data showed that loans by commercial banks grew 6.47 per cent in September on a yearly basis, its weakest in nearly seven years. Official data for October is due later this month.

This year BI has cut its benchmark interest rate six times, eased lending rules and trimmed banks’ statutory reserve requirement ratio, all in a bid to get banks to lend more and lift economic growth. But bankers have said rising bad loans have made them more careful in giving money to borrowers. Agung said the trend of rising non-performing loans had reached its peak and started to come down.

“This year, many companies were consolidating, banks too. But the NPL ratio has improved now and companies have finished their deleveraging process. They are now ready to take on more leverage,” Agung told a media gathering in the resort island of Bali.

“The banking credit cycle is now in a recovery stage,” he added.


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