Banking Credit Grows 13.58 Percent in July 2026, BI Cites KLM Incentive Impact
Bank Indonesia (BI) recorded banking credit growth of 13.58 percent year-on-year (yoy) in July 2026. This figure shows an upward trend compared with the June 2026 realisation of 12.67 percent (yoy).
Acting (Pjs) Governor of BI, Destry Damayanti, explained that this positive development is the result of the consistently loose macroprudential policy implemented by the central bank. One of the main drivers is the optimisation of the Macroprudential Liquidity Incentive Policy (KLM) to encourage financing to priority sectors.
“This positive development is supported by the loose macroprudential policy that continues to be pursued through the optimisation of KLM to encourage increased bank lending to priority sectors,” said Destry, as reported by Antara on Wednesday (19/8).
As of the first week of August 2026, total KLM incentives disbursed to banks reached Rp446.5 trillion. In detail, the financing channel dominated at Rp368.4 trillion, followed by the interest rate channel at Rp73.2 trillion, and the financing to funding channel at Rp4.9 trillion.
Meanwhile, the resilience of the national banking system was reported to remain solid. The capital adequacy ratio (CAR) in June 2026 stood at a high level of 23.70 percent. Credit quality was also maintained, with an aggregate non-performing loan (NPL) ratio that was low at 2.09 percent gross and 0.82 percent net.
Banking liquidity was also observed to be stable, with the ratio of liquid assets to third-party funds (AL/DPK) at 23.10 percent in July 2026. BI is committed to continuing to strengthen liquidity policy to ensure the availability of funds in the money market and banking sector remains adequate for economic growth.
In line with this, base money (M0) in July 2026 grew significantly by 18.3 percent (yoy). This growth was driven by an increase in commercial banks’ current accounts at BI of 22.4 percent (yoy) as well as currency in circulation growth of 15.1 percent (yoy).
The measures taken by BI in maintaining adequate liquidity are confirmed to remain consistent with efforts to achieve the national inflation target.