Corporate Financing Needs Increased in December 2021

Bank Indonesia (BI)'s survey on banking financing supply and demand reports that corporate financing needs increased in December 2021. This is reflected in the Weighted Net Balance (WNB) of 17.4%, higher than the 14.8% recorded in November 2021.

This increase occurred across several sectors. The WNB for the agriculture sector increased to 2.6% in December 2021, the WNB for the motor vehicle repair sector increased to 2.7%, and the WNB for the food and beverage sector increased to 1%.

This increase was largely needed to support operational activities. At least 81.7% of respondents required financing for this purpose.

Furthermore, 28.8% of respondents needed financing to pay maturing obligations. Next, 25% needed financing to support domestic recovery, 17.3% for investment activities, and 6.7% for other needs.

Respondents stated that their financing needs were primarily met through internal funds (55.8%). 9.6% utilized overdraft facilities, 8.7% obtained loans or debt from parent companies, 8.7% increased bank loans, and 1.9% sold unproductive fixed assets.

Respondents' choice of financing sources was primarily influenced by the ease and speed of obtaining funds, lower interest rates, and the optimization of existing facilities.