JAKARTA. Perry Warijyo, Governor of Bank Indonesia (BI), estimated that the bank's credit growth may reach 10% to 12% in 2023, influenced by several factors despite the impending global recession.
In the Financial System Stability Committee (KSSK) conference press last week, Warijyo explained that this estimation is based on every single economic indicator that has shown consistent improvement. He further predicted that by the end of this year, the credit channelling may go over 9% to 11%. "Until the end of September 2022, the banking industry has seen 11% credit growth," he added.
According to Warijyo's words, the ever-improvong credit growth was propelled by three primary factors. The first one is the bank's liquidity rate that is deemed quite relaxed as seen in the ratio of liquidity instruments to third-party funds (AL/DPK) of over 27%. With this rate of liquidity, Warijyo said that the increased interest referenced rate will not rush banks to boost their own credit interest rates, thus minimising the risk of hindering the credit growth in the future.
The second one is incentives. KSSK, comprising the Ministry of Finance, Bank Indonesia, the Financial Services Authority (OJK), and Indonesia Deposit Insurance Corporation (LPS), keeps granting incentives for credit-channelling banks. The incentives in question include the relaxation of the loan to value/financing to value (LTV/FTV) ratio of property credits, 0% down payment for new vehicles, and the reduction of Minimum Statutory Reserves (lit. Giro Wajib Minimum/GWM) up to 1.5%-2% for banks that have distributed credits to 42 priority sectors, including MSME.
The third one if the credit standard. Based on the Banking Survey, banks still show positive willingness and lending standards. (AM/ZH)