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View all search results$12b boost won’t fix all
The finance minister's massive liquidity boost, while well-intended, has ultimately failed to read the mood across all economic layers.
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Shoppers wade through ankle-deep floodwaters on Oct. 13, 2025, as a traditional market carries on with trade as usual in Medan Labuhan district, Medan, North Sumatra. (Antara Foto/Yudi Manar)
W
hen Finance Minister Purbaya Yudhi Sadewa announced a plan Rp 200 trillion (US$12 billion) to inject liquidity into state-owned banks via government funds from the central bank, concerns were raised over whether the move would truly reignite the sluggish economy.
The problem he aims to fix is clear: Loan growth has hit a wall.
But opinions differ on the cause. Some blame the tight liquidity that limits banks’ loan capacity, the very issue Purbaya aims to ease with his injection plan. Others point to weak demand, as borrowers remain hesitant to take on new debt amid uncertainty.
Still, the “cowboy” minister pressed ahead in September, disbursing Rp 55 trillion each to BRI, Bank Mandiri and BNI, Rp 25 trillion to BTN and Rp 10 trillion to BSI.
Yet early data from the banks’ third-quarter financial reports reveal a twist. Instead of increasing outstanding loans for micro, small and medium enterprises (MSMEs), said to be the engines of growth, most of the surge in lending has gone to large corporations.
On paper, this makes sense. Large firms have higher absorption capacity while banks prefer safer bets amid sluggish consumer demand. But it raises a bigger question: Will these corporations reinvest the money to truly spur the economy, or will they use it to expand their operations or simply pad their balance sheets?
Purbaya has acknowledged the risks of this trend and emphasized that the injected funds must flow through real lending to the public to truly stimulate growth. While he noted the government’s limited role, such as being unable to dictate how banks used the money, he said he had made his expectations clear: The funds should not be loaned to conglomerates or used to buy foreign currency.
