Working Capital Loan Interest Rate from State-Owned Banks Above 4%

In the first semester 2017 public financial report, Bank Mandiri (BMRI)'s non-performing loans (NPLs) increased to 3.79 percent from 3.74 percent in the first semester of 2016. Meanwhile, Bank BNI (BBNI) experienced a decrease to 2.83 percent from 2.95 percent. The sluggish economy, accompanied by a decline in public purchasing power, caused businesses to struggle in repaying bank loans and interest. As a result, bank NPLs tended to increase throughout 2017.

Data from the Financial Services Authority (OJK) recorded that the NPLs of state-owned banks (BUMNs) in May 2017 reached Rp 55.242 trillion, or approximately 3.09 percent of the total disbursed funds of Rp 1,789.87 trillion. Working capital loans of state-owned banks had the highest NPL, at 4.33 percent or Rp 34.65 trillion out of a total credit of Rp 800.35 trillion. Investment loans amounted to 2.26 percent or Rp 11.12 trillion out of a total credit of Rp 492.08 trillion, and consumer loans amounted to 1.91 percent or Rp 9.48 trillion out of a total credit of Rp 497.45 trillion.

Working capital loan NPLs of state-owned banks in May 2017 increased by 44 basis points (bps) from their December 2016 position; consumer loans also increased by 28 bps, but investment loans decreased by 13 bps. Overall, however, the state-owned banks' total credit grew by 23 bps compared to the end of the previous year.