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View all search resultsBI presses banks to speed up lending as undisbursed loans hit Rp 2,372t
Bank Indonesia reveals that Rp 2,372.1 trillion in approved bank loans remains unused as of August, warning that sluggish credit expansion, with just 7.56 percent year-on-year growth, could weigh on GDP growth.
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Bank Indonesia (BI) Governor Perry Warjiyo presents the results of the central bank's monthly monetary policy meeting in a live-streamed press conference on Sept. 17, 2025. (JP/Maudey Khalisha)
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ank Indonesia (BI) Governor Perry Warjiyo has urged banks to accelerate lending to support higher economic growth, as credit expansion in August remained below target despite improving liquidity conditions.
According to BI, bank credit grew 7.56 percent yoy in August, up from 7.03 percent in July, but not strong enough to significantly boost economic activity.
At the same time, BI reported that a large portion of approved loan facilities had yet to be used, with undisbursed loans reaching Rp 2,372.1 trillion (US$14.3 billion) in August, or 22.71 percent of total credit lines.
“The largest share of undisbursed loans was recorded in the manufacturing, mining, business services and trade sectors, particularly in working capital loans,” Perry said on Wednesday at a press conference following BI’s two-day policy meeting.
BI noted that bank lending rates were declining only gradually, with the average lending rate down 7 basis points from 9.2 percent at the beginning of 2025 to 9.13 percent in August. The bank underlined that both deposit and lending rates need to fall faster to stimulate loan distribution and strengthen financing as part of efforts to drive higher economic growth.
Read also: BI surprises with third consecutive rate cut as Fed move looms
On the demand side, BI identified businesses’ wait-and-see attitude as one factor behind weak credit disbursement, along with persistently high interest rates and greater reliance on internal funds.
