Bank Credit Surges, Unexpected Sector Becomes Main Engine

Bank credit distribution returned to double-digit growth in May 2026. After growing in single digits over recent months, bank credit has finally regained momentum.

Based on the money supply development report from Bank Indonesia (BI) announced on Tuesday (23/6/2026), credit distributed by banks in May 2026 was recorded at Rp8,759.0 trillion. This figure represents a year-on-year (yoy) growth of 10.8%.

This growth is higher than the 9.4% yoy recorded in April 2026. The May 2026 achievement also marks the highest credit growth since August 2024, or within the last two years, when bank credit grew by 10.9% yoy.

Bank credit had been growing quite strongly throughout 2024. However, from late 2024 into 2025, growth began to slow. Credit frequently moved below 10% before returning to double digits in January 2026, then declining again from February to April.

Now, the pace of credit is rising again. The question is, where is this credit flowing?

Looking at the type of usage, credit growth in May 202<0xA0>26 was primarily supported by investment credit. Of the three main groups, investment credit was the fastest, with growth of 20.5% yoy.

Investment credit is typically used for long-term needs, such as asset construction, machinery purchases, business expansion, factory construction, property development projects, and business-supporting infrastructure.

Meanwhile, working capital credit grew by 7.9% yoy. This type of credit is usually used by companies for daily operational needs, such as purchasing raw materials, paying production costs, or maintaining business cash flow.

On the other hand, consumer credit grew at a lower rate of 5.8% yoy, which actually experienced a decline compared to the previous month’s growth. Consumer credit includes loans closer to households, such as home ownership loans, motor vehicle loans, credit cards, and multi-purpose loans.

With this composition, the increase in credit in May 2026 was not solely supported by public consumption. The largest driver actually came from investment financing, which is typically related to business expansion and the development of productive assets.

Construction Investment Credit Surges by 65%

The most significant surge in investment credit was seen in the construction sector. In May 20 6, investment credit to this sector grew by 65.1% yoy. The outstanding credit was recorded at Rp292.6 trillion, a sharp increase compared to May 2025, which stood at Rp177.3 trillion. This means there was an additional Rp115.3 trillion in construction investment credit over the year.

This increase makes the construction sector one of the main pillars of bank investment credit.

The surge in construction sector investment credit is not entirely new. During President Joko Widodo’s era, credit to this sector also grew strongly, driven by massive development of national strategic infrastructure projects.

At that time, the main driver came from large-scale projects that were physically prominent, ranging from the Trans-Java Toll Road, the Trans-Sumatra Toll Road, road projects in Kalimantan, to infrastructure development in Papua. With projects of such scale, the need for construction financing also increased.

However, the pattern in 2026 seems different. The surge in construction investment credit this time does not necessarily reflect the return of massive toll road construction as seen in previous periods.

In the era of President Prabowo Subianto, the direction of government programmes has shifted more towards projects spread across regions and directly related to community needs and local economic activities. These take forms beyond just roads, including housing, warehouses, business outlets, logistics facilities, production zones, and buildings supporting government programmes.

Therefore, the 65.1% yoy surge in construction investment credit in May 2026 is more accurately read as a sign of new projects moving forward. It is no longer solely about large-scale road infrastructure, but rather the construction of facilities that are more dispersed and closer to regional economic activities.

Growth in the construction sector is also visible not only in investment credit. Working capital credit to the construction sector also grew highly, at 26.6% yoy in May 2026.

This condition indicates that financing needs in the construction sector come not only from asset or long-term project development but also from the operational needs of ongoing projects. Working capital credit is usually used for daily company needs, such as purchasing building materials, paying labour, project execution costs, and contractor cash requirements.

In nominal terms, construction working capital credit rose from Rp229.7 trillion in May 2025 to Rp290.7 trillion in May 2026. This means there was an addition of approximately Rp61.0 trillion within a year.

Not Toll Roads, Village Cooperatives Expected to be the New Driver

This difference in programme direction makes the sources of construction credit growth in 2026 more diverse. One area worth noting is the Merah Putih Village/Sub-district Cooperative (KDKMP) programme.

This programme has significant development needs. It involves not only the institutional formation of cooperatives but also the construction of outlets, warehouses, and supporting facilities in many regions.

Under PMK Number 15 of 2026, the government regulates the distribution of DAU/DBH or Village Funds to accelerate the physical construction of outlets, warehouses, and the completeness of the Merah Putih Village/Sub-district Cooperatives. This regulation has been in effect since 1 April 2026.

The implementation of the programme is already becoming visible. As of 16 May 2026, 9,294 Merah Putih Village/Sub-district Cooperatives have been built. Of that number, 1,061 cooperatives have begun operating simultaneously.

This operationalisation is centred in Cooperatives…