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OJK confident banks can achieve double-digit loan growth this year
However, an analyst has cast doubt on that target, pointing to the 2024 election.
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High-rise buildings are seen in the Sudirman central business district of Jakarta on March 14, 2021. (AFP/Adek Berry)
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ndonesian banks disbursed Rp 6.69 quadrillion in loans in the first seven months of this year, marking an 8.54 percent annual rise, but the Financial Services Authority (OJK) expects lending to accelerate significantly by the end of the year.
The rate as of July was up from the previous month, when year-on-year (yoy) loan growth by domestic banks was 7.76 percent.
State-owned banks continued to outpace their private peers in loan growth, with a 9.81 percent expansion. By type, credit for investment saw the fastest growth, at around 11.5 percent.
Dian Ediana Rae, who heads the banking supervision division at the OJK, acknowledged that loan growth at domestic banks was below last year’s 10.4 percent. However, he was still optimistic that growth would hit 10 percent or 11 percent by year-end.
"There is nothing to be worried about [...]. Based on our observations, loan disbursement usually accelerates near the end of the year," Dian said at a press briefing on Tuesday.
Read also: Banks reluctant to go full throttle despite shrinking loans at risk
Dian said the slower yoy growth in the middle of the year was the result of a base effect, as the current level was compared to that at the middle of last year, when loan disbursement had increased significantly following the pandemic.
