Banks Predicted to Ease Lending Standards, Credit Disbursement to Rise in Q2 2026

JAKARTA — Prospects for banking intermediation in Q2 2026 are estimated to strengthen, supported by increased new credit disbursements, growth in third-party funds (DPK), and relaxation of lending standards.

Bank Indonesia’s (BI) Banking Survey indicates that banks’ optimism regarding credit growth throughout this year remains intact, albeit at a more moderate pace compared to the previous year’s realisations.

This forecast emerges following sustained growth in new credit disbursements in Q1 2026, though slower than in Q4 2025. The Weighted Net Balance (SBT) for new credit disbursements was recorded at 38.74 per cent, down from 88.92 per cent in the previous quarter.

Meanwhile, Investment Credit and Working Capital Credit each grew with SBT figures of 37.33 per cent and 36.40 per cent, respectively, although lower than in the prior period.

For consumer credit, the main drivers came from Multi-purpose Loans with an SBT of 51.90 per cent, Unsecured Loans at 37.23 per cent, and Motor Vehicle Loans at 13.38 per cent.

Home loans (KPR/KPA) and credit cards continued to grow, albeit at a slower rate, with SBTs of 42.33 per cent and 47.05 per cent, respectively.

On the other hand, several sectors experienced slowdowns, such as financial intermediation with an SBT of 52.32 per cent, processing industries at 50.31 per cent, and wholesale and retail trade at 19.42 per cent.

Entering Q2 2026, banks’ expectations for financing demand have risen significantly. This is reflected in the SBT forecast for new credit disbursements, which surged to 96.65 per cent, far exceeding the Q1 2026 realisation of 38.74 per cent.

The survey shows that the primary focus for new credit disbursements in Q2 2026 remains on Working Capital Credit, followed by Investment Credit and Consumer Credit. This prioritisation aligns with patterns from previous periods.

Based on economic sectors, the largest new credit disbursements in Q2 2026 are projected to flow into the processing industries, wholesale and retail trade, and financial intermediation sectors.

This increase in the projection for new credit reflects banks’ expectations of improving financing demand, particularly to support business activities and consumption in the second quarter.

Alongside the rise in credit disbursement forecasts, banks’ policies on financing are also expected to become more accommodative.

In BI’s survey methodology, a positive Interbank Lending Standard (ILS) indicates tightening, while a negative value indicates easing.

This more cautious stance was particularly evident in investment credit, with tightening in aspects such as loan tenor and administrative requirements.

However, for Q2 2026, lending standards are projected to reverse and become looser, as reflected by a negative ILS of 2.88.