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Credit growth is expected to increase in 3Q

17 July 2019 12:19

JAKARTA - The Bank Indonesia Banking Survey shows that new quarterly credit growth has increased in quarter II-2019 and quarter III-2019. This development was reflected in the weighted net balance (SBT), demand for new credit in the second quarter 2019 of 78.3%, higher than 57.8% in the previous quarter.

Based on the type of usage, the increase was mainly derived from investment credit and consumption credit. In the third quarter of 2019, growth in new credit is predicted to increase, driven by optimism about the strengthening economic conditions supported by stable political and security conditions after the election, and the relatively low risk of lending.

In line with the forecast for increased new credit growth, the lending policy in the third quarter of 2019 is predicted to be looser, as indicated by the Lending Standard Index (ILS) of 0.8%, lower than 12.4% in the previous quarter. Standard easing will be carried out on all types of credit, with aspects of the credit channeling policy that will be relaxed including credit and collateral terms.

The survey results indicate that respondents remain optimistic about credit growth for the whole of 2019. Respondents predict credit growth in 2019 will reach 11.2%. This optimism was driven by forecasts of the relatively low risk of credit disbursement, as well as the still maintained capital adequacy ratio and bank liquidity. (LM)

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