Relaxation of mobility restrictions will spur credit distribution: OJK

Relaxation of mobility restrictions will spur credit distribution: OJK

Illustration — Chairman of the board of commissioners of the Financial Services Authority (OJK), Wimboh Santoso, during a working meeting with Commission XI of the House of Representatives (DPR) in Jakarta on Monday (August 30, 2021). (ANTARA/Agatha Olivia/KT)

BPD has been barely affected by COVID-19 because its credit is (distributed) more to civil servants (ASN). There are also state-owned banks that provide credit programs.
Jakarta (ANTARA) - The Financial Services Authority (OJK) has expressed optimism that the relaxation of public mobility restrictions would push up credit distribution by banks after a period of contraction.

"We remain confident that the mobility opening will help the credit distribution, and even better with the banks," Head of OJK's Board of Commissioners Wimboh Santoso said during a working meeting with Commission XI of the House of Representatives here on Wednesday.

In general terms, the financial services sector is still stable and secure, he said.

The stability has also been witnessed in the banking industry, where its prudential indication is well-maintained, he pointed out.

It is reflected in the credit distribution, which has still been recorded as positive, with a growth of 0.5 percent (yoy) and 1.5 percent (ytd), Santoso informed.

Credit distribution by banks contracted 0.32 percent (mtm) in August this year as a result of mobility restrictions in July, he said.

Related news: Under-thirty young investors dominating capital market: OJK

He said that as of July 2021, banks had distributed Rp1,439 trillion in credit, including acquittance and payment of credit installments, which reached Rp1,332 trillion during the same period.

"The net is small. Of course, this is because some companies have not recovered and paid off their credits," Santoso explained.

However, he predicted that the room for credit growth will still remain open as it is supported by the Regional Development Bank (BPD) and state-owned banks, with credit distribution primarily targeted at MSMEs with People's Business Credit (KUR).

He said MSMEs' credit grew steadily by 1.93 percent (yoy) and 1.11 percent (ytd), and it is expected that the growth of MSMEs can encourage corporate credit in the future.

"BPD has been barely affected by COVID-19 because its credit is (distributed) more to civil servants (ASN). There are also state-owned banks that provide credit programs," he added.

For national private and commercial banks, they are still hindered by the contraction of minus 2.62 percent (yoy) and minus 4.5 percent (ytd) in credit, he said.

Related news: 72% of debtors with restructured credit are MSMEs: OJK

 

Comments