Bank Lending in Solo Declines 1.7 Percent Amid High NPLs

The performance of bank lending in the Solo Raya region remains under pressure. The Financial Services Authority (OJK) in Solo recorded that bank credit in April 2026 fell by 1.70 per cent, equivalent to Rp 1.78 trillion, on an annual basis. At the same time, the non-performing loan (NPL) ratio remained at a high level of 9.81 per cent. OJK data shows that although the NPL declined slightly compared to the previous month, the figure is still far above the banking sector’s prudential threshold. Troubled credit in the non-MSME business segment was recorded even higher, reaching 12.45 per cent. Meanwhile, NPLs in the MSME sector also continue to show strain. For medium-sized enterprises, the ratio was recorded at 10.51 per cent, small businesses at 6.51 per cent, and micro businesses at 5.17 per cent. This condition indicates that credit quality in the productive sector has not fully recovered. Head of OJK Solo, Mohammad Mufid, stated that the high level of non-performing loans has affected the attitude of both banks and business actors in extending and taking up financing. On the other hand, MSME players also tend to hold back from taking on new debt. ‘Many MSME players are choosing to hold back and not borrow money from banks because this sector is indeed slowing down,’ Mufid said in Solo on Saturday, 13 June 2026. He explained that this situation has even led some business actors who have already been approved for loans to decide not to disburse the funds. Their main considerations are business uncertainty and concerns about being unable to meet payment obligations. ‘Because the situation is still wait and see. Business support feels heavier, so they are being more cautious,’ he said. According to Mufid, the slowdown in lending is not only related to the caution of business actors but also reflects structural challenges in the regional economy, especially in the trade and manufacturing sectors. Amid this situation, he said the OJK, together with the regional government in Solo Raya, is beginning to encourage the strengthening of new economic sectors. The city of Solo is being directed to develop tourism and the creative economy as pillars of growth. ‘We, together with the Mayor and business actors, are initiating how to drive the regional economy according to Solo’s core strengths, namely tourism and the creative economy,’ Mufid said. He assessed that this sector has the potential to create a multiplier effect across various business lines, from hospitality and culinary to MSMEs. In addition to credit conditions, the OJK noted an increase in requests for information access through the Financial Information Service System (SLIK). This surge indicates a growing public awareness of the importance of financial track records. SLIK is now not only used by banks to assess creditworthiness but is also beginning to be considered by a number of companies in their recruitment processes. ‘SLIK has become important information for financial service institutions in making decisions. In fact, some companies are now using it as one of the considerations when recruiting employees,’ Mufid said. He reminded the public to maintain the quality of their financial records, including discipline in paying loans and paylater services. All transaction histories will be recorded and will affect future access to financing. ‘If you have arrears, including unpaid paylater, it will appear in your SLIK record,’ he said.