Indonesia's Banking Sector Shows Signs of Slowing New Credit Disbursement as of December 2021

Disbursement of new banking credit indicated a slowdown in December 2021 compared to the previous month. Based on Bank Indonesia's (BI) Survey of Bank Financing Supply and Demand, the weighted net balance (WNB) of new credit disbursement in December 2021 was recorded at 64.9%, lower than the November 2021 WNB of 81.7%.

This slowdown in new credit growth in December 2021 was indicated in both general banks and regional development banks (BPD). The WNB for general banks slowed from 80.1% in November 2021 to 63% in December 2021. The WNB for BPDs slowed from 96.6% to 74.9%.

Meanwhile, the WNB for Islamic commercial banks reached 100% in December 2021, an increase from 95.4% the previous month.

Based on usage type, new credit growth slowed in investment credit and working capital credit. Meanwhile, new credit disbursement for home ownership loans (KPR) and consumer credit is expected to have grown higher in December 2021.

Based on business sector category, new credit disbursement in that period prioritized the wholesale and retail trade sector, followed by the processing industry, and agriculture, forestry, and fisheries.

The central bank explained that the main factors influencing the estimated disbursement of new credit in December 2021 were financing demand from customers, as well as the outlook for monetary and economic conditions going forward.