Banking credit in July was driven by consumption loans, which grew 2.40 percent (yoy) and MSME loans, which rose 1.93 percent (yoy), OJK deputy commissioner for public relations and logistics, Anto Prabowo, said in a statement issued in Jakarta on Thursday.
"Credit to export-oriented commodity sectors has begun to increase and is expected to continue to grow in the future in line with rising prices and demand in the United States and China," Prabowo disclosed.
In the January-July period this year, banks disbursed loans amounting to Rp1,439 trillion, according to the OKJ. However, during the same period, there were repayments and payments of credit installments, including from several large debtors, which reached Rp1,332 trillion, it added.
In terms of funding, banking third party funds (DPK) still recorded double-digit growth of 10.43 percent (yoy), Prabowo said. In terms of interest rates, the transmission of Bank Indonesia's policy of lowering interest rates has been continued by lowering lending rates to a fairly competitive level, he added.
Meanwhile, the banking industry's liquidity is still considered by OJK to be at an adequate level, he informed.
"The ratio of liquid assets/non-core deposits and liquid assets/DPK as of July 2021 was monitored at the level of 149.32 percent and 32.51 percent, respectively, above the threshold of 50 percent and 10 percent, respectively," he said.
In terms of financing quality, OJK recorded a gross non-performing loan (NPL) ratio in July 2021 of 3.35 percent, and a net NPL ratio of 1.09 percent, he revealed.
"OJK continuously conducts assessments of the financial services sector and the economy to maintain the momentum of accelerating national economic recovery and continue to strengthen synergies with stakeholders in order to maintain financial system stability," he said.
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Meanwhile, during an online discussion on Thursday, senior deputy governor of Bank Indonesia (BI), Destry Damayanti, drew attention to at least four strategies that can drive banking credit growth in 2021.
"We earlier estimated credit growth to lie between six to eight percent this year, but we lowered it down to four to six percent. However, the application of four strategies can accelerate growth," Damayanti said.
The senior deputy governor had noted that the first strategy entails sustained improvement in the global economy that can lift global commodity prices, so that Indonesia, as a commodity-based country, will also be able to enjoy rising prices and boost credit.
Under the second strategy, a relatively high capital capacity, with a secured level of risk, including the resilience of bank liquidity, can encourage banks to continue to channel credit, according to Damayanti.
The third strategy involves expediting corporatization and economic and finance digitalization for supporting economic recovery, especially for MSMEs, the pillars of the country's economy, she said.
The fourth strategy entails an effective cross-sectoral policy mix, she added.
With that, the BI, Financial Services Authority (OJK), Finance Ministry, and Deposit Insurance Agency (LPS) can continue to increase synergy and coordination in the national economic recovery agenda as well as boost banking intermediation, she remarked.
Related news: Growth of banking credit can reach 14 percent in 2019: OJK
Translator: Indra A, Azis Kurmala
Editor: Rahmad Nasution
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