Bank credit disbursement is projected to return to single-digit growth in 2017. Data from Indonesian Banking Statistics recorded that bank credit in June 2017 reached Rp 4,491.18 trillion, representing a growth of only 7.75 percent compared to June of the previous year, which stood at Rp 4,168.3 trillion. This figure is not significantly different from credit growth in 2016, which was 7.87 percent year-on-year.
The sluggish domestic economy and the rising number of non-performing loans (NPLs) have made banks more cautious in extending credit to the public. Furthermore, businesses have also been hesitant to draw down loans amid economic stagnation. For information, Indonesia's economy grew by only 5.01 percent (YoY) in the second quarter of 2017, the same as the previous quarter.
Meanwhile, Third Party Funds (TPF) as of June 2017 grew by 10.3 percent to Rp 5,045.99 trillion from Rp 4,574.67 trillion in June of the previous year. This achievement is higher than in 2016, which only saw 9.6 percent growth.
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