2011-2016 Slowdown in Credit and DPK Growth in the Banking Sector

Bank lending and third-party funds (DPK) growth have slowed. In 2011, credit grew by 25.5 percent and national bank DPK grew by 20 percent. However, credit disbursement growth was only 3.7 percent and DPK growth was 4.34 percent until September 2016 compared to the end of 2015.

The 2010 European debt crisis and the slowing Chinese economy contributed to the slowdown in the domestic economy. The fall in oil prices from mid-2014 to early 2016 further hampered credit growth and public fund mobilization in 2015-2016.

The slowing domestic economy due to weak demand led businesses to refrain from expansion, resulting in slower credit demand. This unfavorable condition caused banks to become more cautious in lending. The Bank Indonesia's benchmark interest rate cuts, impacting savings interest rates, prompted people to invest in higher-yielding instruments such as bonds, stocks, and mutual funds. This also contributed to the slowdown in DPK growth.