In a reflection of growing optimism about the economy, domestic lenders are targeting an average increase in 2010 loan growth of 24 percent, higher than the central bankâ€™s forecast of 17 percent to 20 percent.
Halim Alamsyah, Bank Indonesiaâ€™s director of banking research and regulation, said on Thursday that the lendersâ€™ targets were disclosed in their 2010 business plans, submitted to the central bank last month.
â€śAccording to the plans sent to us, the average target is 23.8 percent, so lenders are more optimistic than Bank Indonesia,â€ť he said. â€śOn the liquidity side, banks have more than enough funds, so there would be no problem with the target.â€ť
The lendersâ€™ optimism was due to the improving global and domestic economies and the current low interest rates, he said.
Joseph Luhukay, vice president director of PT Bank Danamon, said a clearer picture of the economy would be available after first-quarter data had been released, but said 2010 was likely to be better than 2009.
â€śWe are optimistic,â€ť he said. â€śOur loan-growth target is more than 20 percent this year. The loan growth will come from all sectors - mortgages, for example - but it will still depend on whether the lenders are brave enough to take the opportunities.â€ť
Not all banks are predicting big growth in lending. Small lender PT Bank Jasa Jakarta said it was expecting 10 percent growth.
â€śWe are still waiting for further developments in the political situation,â€ť said Lisawati, the bankâ€™s vice president director. â€śIf there is no further threat then we will revise upwards in the middle of the year.â€ť
Lisawati said bankers were optimistic about the countryâ€™s prospects because it had weathered the global downturn well.
Earlier this month, Bank Indon e sia said credit growth remained sluggish and that it had actually contracted in January from the previous month. But it said growth in lending should expand in coming months because of low interest rates and increased liquidity in the economy.
On interest rates, Bank Indonesia said gap between lending rates and its 6.5 percent benchmark rate was narrowing. In December, the average lending rate for working capital was 13.69 percent, down from 13.96 percent in November.
Money supply in December had also increased by Rp 14.2 trillion to Rp 521 trillion, mainly due to a significant increase in consumer and corporate spending.
â€śThis is an early signal that economic activity is rising,â€ť Bank Indonesia said.