BI: New credit growth predicted to increase in first quarter

19 January 2021 10:27

JAKARTA - The Bank Indonesia Banking Survey indicates that new credit disbursements will increase in the first quarter of 2021. This is indicated by the new credit disbursement of 49.4% in the first quarter of 2021, up from 25.4% in the fourth quarter of 2020.

New credit disbursement in the first quarter of 2021 is predicted to be driven by working capital credit, followed by investment credit and consumption credit. Meanwhile, credit growth is predicted to remain limited in Q4 2020, influenced by growth in investment credit.

Lending standards in the first quarter of 2021 are predicted to be less stringent than the previous period. This is indicated by the Lending Standard Index (ILS) of 0.4%, lower than 3.2% in the previous quarter. Aspects of disbursement policy that are not predicted to be as tight as the preceding quarter include the credit limit and credit period.

The survey results indicated that respondents are still optimistic about credit growth for 2021. Respondents predicted credit growth in 2021 of 7.3% (yoy). This optimism was driven, among others, by monetary and economic conditions, as well as the relatively manageable lending risk. (LM)

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