Indonesian Banking Sector Shows Signs of Increased New Credit Disbursement in November 2022

Bank Indonesia reports that new credit disbursement by banks in November 2022 indicated an increase compared to the previous month. This is reflected in the Weighted Net Balance (WNB) of new credit disbursement, which reached 58.6%, higher than the 32.8% WNB in the previous month.

The main factors influencing the estimate of new credit disbursement are customer financing demand, prospects for future monetary and economic conditions, and the level of competition from other banks. Meanwhile, for the entire fourth quarter of 2022, new credit growth is projected to increase compared to the previous quarter. The WNB of new credit disbursement is estimated at 89.1%, higher than 84.5% in the third quarter of 2022.

Demand for corporate financing in November 2022 indicated positive growth. This is reflected in the corporate financing WNB of 13.2%.

The majority of financing sources are primarily met from internal funds, followed by the addition of new credit to domestic banks, utilization of overdraft facilities, and loans/debt from parent companies.

On the household side, demand for new financing also indicated positive growth in November 2022. The majority of households chose commercial banks as the main source of increased financing, which was observed to have increased compared to the previous month.

The type of financing applied for by households is mostly Multi-Purpose Credit. Other financing sources preferred by respondents to meet their financing needs include cooperatives and leasing companies.