Low-Income Households Have the Highest Debt

Bank Indonesia reports an increase in household financing through debt or credit. This is reflected in the percentage of households reporting increased debt, reaching 8.7% of total respondents in August 2021. This figure is higher than the previous month's 7.6%.

Considering respondents' spending levels, most loan applications (44% of total applications) came from households with monthly expenditures of Rp 1-3 million. However, this percentage decreased from 47.9% the previous month.

Next, applications came from the Rp 3-5 million monthly expenditure group. This group saw an increase, from 38.3% in July 2021 to 42.5% in August 2021.

Finally, the group with expenditures above Rp 5 million showed a slight decrease. Loan applications from this group amounted to 13.5% in August 2021, down from 13.8% the previous month.

BI also stated that interest rates were the primary consideration in loan applications in August 2021, accounting for 29.2%. This was followed by lender approval at 17.2%, and administration at 19.4%.