Since 2012, bank credit growth has slowed.

Until September 2017, the disbursement of bank credit grew by only 7.86 percent to Rp 4,543.38 trillion from Rp 4,212.63 trillion in September 2016 (YoY). The sluggish domestic economy, impacting public purchasing power, caused businesses to refrain from expansion by borrowing capital from banks. Meanwhile, banks exercised extra caution in disbursing loans to maintain [problematic loans](https://databoks.katadata.co.id/datapublish/2017/11/13/agustus-2017-npl-sektor-pertambangan-di-atas-8-persen).

Since 2011, the growth of national bank credit has shown a downward trend, growing only in single digits in 2016. The financial crisis that hit the United States and the still-unrecovering European economy caused a decline in demand for Indonesia's main commodities. The fall in oil prices since mid-2014 impacted the mining sector. Coupled with the decline in prices of Indonesia's leading commodities, [export performance](https://databoks.katadata.co.id/datapublish/2016/08/18/5-tahun-nilai-ekspor-indonesia-terus-merosot) also slumped.

This situation ultimately affected all sectors, leading to a decline in public purchasing power. This is reflected in household consumption, which has consistently grown below five percent since the fourth quarter of 2016. Small banks categorized under Bank Kelompok Usaha (BUKU) I were the hardest hit, resulting in negative credit growth.

(Read Databoks: [September 2017, BUKU I Bank Credit Down 36 Percent](https://databoks.katadata.co.id/datapublish/2017/11/20/september-2017-kredit-bank-buku-i-turun-36-persen))