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View all search resultsS&P Global Ratings has cautioned about earnings and concentration risks at state lenders amid rising exposure to state-owned enterprises (SOEs) and the government’s economic programs, which has expanded their loan growth at twice the industry rate.
Bank lending to micro, small and medium enterprises (MSME) remains sluggish despite multiple policy efforts to invigorate the segment. Analysts blame weak consumer spending power and the risky credit profile of many small businesses.
The OJK expressed optimism on Friday that "strong banking capital resilience" would help serve as a buffer against the impacts of a weakening rupiah, after unveiling the industry's loan growth figures in April.
OJK has projected credit in the micro, small and medium enterprises (MSMEs) segment to grow between 7 percent and 9 percent this year, while overall loan growth is expected to reach between 10 and 12 percent.
The OJK as well as industry observers have welcomed the Finance Minister's move to extend the liquidity injection policy for another six months in a bid to generate higher loan growth, while suggesting that a subsequent extension could be on the books when the current period ends in March.
Credit growth rose 7.74 percent year-on-year (yoy) to Rp 8.3 quadrillion (US$493 billion) in November, accelerating from growth of 7.36 percent yoy in October, according to the Financial Services Authority (OJK).
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