Indonesian banks’ credit growth declined to 1.49 percent in the first half of the year, said Wimboh Santoso, Chairman of the Board of Commissioners of the Financial Services Authority (OJK) at an online press conference here on Tuesday.
"Banking loans grew by only 1.49 percent in the first half of the year. Meanwhile, finance company receivables contracted 7.3 percent and third-party funds grew 7.95 percent,” Wimboh informed.
In June, community activities did not recover on account of the COVID-19 pandemic, and this put pressure on credit distribution, he noted.
"We are aware of this decline (in credit growth), so our hopes are only temporary," he remarked.
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Providing further details, Wimboh said the deepest decline in credit during the first half of 2020 was seen at BUKU III banks ( BUKU III category includes banks with a core capital of Rp5 trillion-Rp30 trillion), with loan growth reaching 2.25 percent. Meanwhile, at BUKU IV banks ( BUKU IV are the highest category of banks, whose core capital exceeds Rp30 trillion), loans still swelled by 2.88 percent.
BUKU 1 banks (the lowest category, which includes banks with core capital below Rp1 trillion) registered a credit growth of 3.94 percent.
Meanwhile, loans swelled by up to 4.81 percent at BUKU 2 banks (which have a core capital of Rp1 trillion-Rp 5trillion).
In terms of segment credit, there was pressure on Working Capital Credit (KMK), which contracted 1.3 percent, while Investment Credit (KI) grew 5.6 percent, and Consumer Credit (KK) rose by 2.3 percent.
Wimboh said he hoped the economy would soon recover from the slowdown brought on by the COVID-19 pandemic, with the adoption of “new habits” helping community activities return to normal.
"Our hope is that after the economy grows, the company can rise," he said.
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