Bank Lending Grows 12.67% in June 2026 Despite Rising Interest Rates

Bank Indonesia (BI) recorded banking credit growth of 12.67% year-on-year (yoy) in June 2026, an increase from the 11.51% yoy growth seen in May 2026. Based on the type of use, this development was supported by investment credit, working capital credit, and consumer credit, which in June 2026 grew by 24.90% yoy, 8.94% yoy, and 5.75% yoy, respectively. “Bank Indonesia forecasts that credit growth in 2026 will be maintained in the range of 8-12%,” said BI Governor Perry Warjiyo during a press conference on Wednesday (22/7/2026). BI considers the strong growth trend in bank lending to be supported by potential on the demand side, in line with the still large amount of undisbursed loan facilities, which reached Rp2,490 trillion or 21.52% of the available credit ceiling. “Therefore, its realisation needs to be continuously encouraged to support economic financing,” said Perry. On the supply side, the lending appetite also remains accommodative and is supported by high growth in third-party funds, which reached 10.21% yoy. In addition, developments in banking interest rates are expected to encourage credit growth, including support from the publication of the Prime Lending Rate transparency assessment. The development of the 1-month deposit rate in June 2026 was recorded at 4.76%, while the lending rate as of June 2026 was recorded at 8.81%. In June 2026, the weighted average Rupiah lending rate increased from 8.72% in May 2026. This condition is in line with the increase in the new lending rate to 9.49% from 9.31% in the previous month. According to BI, the increase was influenced by heightened competition in the funding market amid persistently strong credit growth, declining liquidity conditions, and the transmission of the BI-Rate hike. On the other hand, the adjustment of lending rates also reflects banks’ efforts to maintain a balance between rising funding costs, credit risk management, and sustainable profitability. By bank group, in June 2026 the KCBA group recorded the largest increase in new lending rates, rising to 8.45% from 7.64% in May 2026, mainly influenced by pricing adjustments in consumer credit due to increased risk perception in that segment. The state-owned bank and private national bank groups also recorded increases in new lending rates to 8.03% and 10.99%, respectively, from 7.65% and 10.88% in the previous month, driven by interest rate adjustments across most credit segments in response to rising funding costs. Conversely, the regional development bank group lowered its new lending rate to 8.62% from 9.18% in May 2026, supported by operational cost efficiency that provided room to maintain credit competitiveness. According to BI, these differing responses indicate that credit pricing strategies are influenced not only by rising funding costs but also by liquidity conditions, funding structures, operational efficiency, risk profiles, and the business focus of each bank group.