"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.
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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.
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