The Jakarta Post
Maybank Indonesia is finding it hard to reduce the lending rate below single digit as the country’s corporate-risk profile is still high at above 10 percent, meaning that the lending rate must be set higher than the figure.
Based on the latest prime-lending rates as of July, the Malaysia-based lender charged a 10.75 percent rate for corporate loans, 11.75 percent for retail loans, and 18.3 percent for micro credit.
"But for top-tier companies, we have already been giving them an interest rate of 9 percent," Maybank Indonesia president director Taswin Zakaria said at Maybank's Invest ASEAN 2016 event in Jakarta on Wednesday.
Weak commodity prices, he continued, hampered the risk profile for corporations operating in mining and plantations. He was worried that no significant improvement would be seen in the sector next year.
Maybank also projects that the small and medium-sized enterprises (SMEs) sector will remain risky. As of July, the firm recorded an average interest rate for SMEs of 14.02 percent, higher than the government’s expectation of 9 percent rates for the sector.
"As corporate risk is still high, the lending rate will consequently be higher for micro lending too," Taswin said. (ags)
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