Bank Indonesia notes growing private sector demand for credit
Bank Indonesia reports that private firms are beginning to seek more loans as overall bank lending rose sharply year-on-year.
Bank Indonesia is closely monitoring a buildup of undisbursed loans, which remain sizable, as private companies show increasing appetite for financing. Governor Destry Damayanti explained that both demand and supply factors contribute to the high loan backlog, noting that the private sector is now displaying a positive trend. The central bank has re-activated its Macroprudential Liquidity Incentive Policy to encourage banks to allocate more liquidity to productive lending rather than securities.
Under the scheme, lenders can earn a discount on their statutory reserve requirement if they keep non-repo government securities below a set threshold. BI expects this to channel more funds into the real economy. Recent figures reveal that total bank lending grew by 13.65 percent year-on-year, with investment credit up over 25 percent and working-capital loans rising more than 11 percent, signaling strengthening economic momentum.
Why it matters
Rising private credit demand could boost investment and growth in Indonesia's economy.
How the sides frame it
LOW AGREEMENTLeft-leaning coverage emphasizes rising private-sector credit demand and a macroprudential policy to channel liquidity to productive lending, while centrist coverage stresses the need for better governance and credit access for small businesses, noting that MSME lending still lags.
LEFT
Highlights growing private-sector appetite for loans and a policy to steer bank liquidity toward productive lending.
CENTER
Urges small businesses to improve governance and widen credit access, pointing out persistent gaps in MSME lending.
The left emphasises
- private companies show increasing appetite for financing
- re-activated its Macroprudential Liquidity Incentive Policy
- total bank lending grew by 13.65 percent year-on-year
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