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Bank Indonesia expects rapid loan growth in 2022
The central bank sees credit growing between 6 and 8 percent and year and third-party funds rising 7 to 9 percent.
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B
ank Indonesia (BI) forecasts a significant acceleration in loan disbursement next year as it plans to encourage banks to reduce excessive liquidity and spur lending to buoy a recovering economy.
Credit growth is forecast to stand between 6 and 8 percent next year, picking up from between 4 and 6 percent this year, according to BI Governor Perry Warjiyo.
“The credit offers from banks remain relatively conducive; interest rates are falling, liquidity is abundant and lending standards are improving,” Perry said in his annual speech on Nov. 24. “Our policy focus is on spurring credit demand from businesses.”
The announcement comes at a time when credit growth has been improving after the Delta wave of the coronavirus in the country peaked in July. The outbreak prompted BI to revise downward its credit growth outlook for this year from the earlier projection of 5 to 7 percent.
Loan disbursement grew by 3.24 percent year-on-year (yoy) to Rp 5.65 quadrillion in October, the latest BI data show.
Read also: Bank Mandiri lowers 2021 credit growth forecast to 3–4%
Several sectors are ready to increase borrowing, according to Perry, including horticulture, crops and tobacco, manufacturing, wood and furniture, paper, manufacturing, food and beverages as well as metal mining.
“Other sectors may need stimulus, tax incentives, credit guarantees, an interest rate subsidy, macroprudential relaxation from BI, [or a loan] restructuring extension from the [Financial Services Authority],” said Perry.
With the central bank planning to spur lending and reduce excess liquidity in various sectors, third-party funds are forecast to grow by between 7 and 9 percent next year, slower than the 8 to 10 percent forecast for this year.
Third-party funds grew by 9.44 percent to Rp 7.24 quadrillion in October from a year earlier, BI data show.
State-owned publicly listed Bank Rakyat Indonesia (BRI) is more optimistic about its own credit growth, aiming at between 8 and 10 percent for next year, according to corporate secretary Aestika Oryza Gunarto.
BRI is also confident about achieving the credit growth target of 6 to 7 percent it set itself for this year. In the first nine months, the bank has disbursed Rp 1.02 quadrillion in loans, marking an increase of 9.74 percent from a year earlier.
“BRI is optimistic that credit growth will continue to improve going forward, taking into account the economic conditions that are gradually returning to normal as a result of the decline in the pandemic,” Aestika told The Jakarta Post in a text message on Friday. “Going forward, BRI’s third-party funds will continue to grow positively.”
Publicly listed Bank Central Asia (BCA) maintains its expectation that its credit growth this year will fall between 4 and 6 percent, supported by its ample liquidity and uptick in demand for credit as business activity recovers.
In September, BCA booked 4.1 percent yoy growth in loan disbursements to Rp 605.9 trillion, driven by the corporate segment. The lender’s credit growth is supported by high-performing sectors, namely animal and vegetable oils and telecommunications.
“Going forward, BCA expects that Indonesia’s economy will continue to rebound,” BCA corporate secretary Hera Haryn told the Post in a text message on Friday. “This is in line with the economic recovery that has started, coupled with healthcare protocols and other key policies from regulators and banking authorities.”
