BI: Consumer Credit Becomes the Engine of Banking Credit Growth

JAKARTA — New banking credit disbursements continued to grow in the first quarter of 2026, although the pace slowed compared to the previous quarter. Behind this growth, Bank Indonesia’s Banking Survey reveals one main pillar: consumer credit. The central bank recorded a weighted net balance (WNB) for new credit disbursements in Q1-2026 at 38.74 per cent, lower than 88.92 per cent in Q4-2025. Interestingly, the growth in new credit was primarily supported by consumer credit, with a WNB of 51.97 per cent. This figure is higher than investment credit at 37.33 per cent and working capital credit at 36.40 per cent. The data shows that, amid the moderation in overall credit expansion, financing related to household needs remains the main engine of bank credit growth. Within consumer credit details, the increase was mainly driven by multi-purpose credit with a WNB of 51.90 per cent, followed by unsecured credit (KTA) at 37.23 per cent, and motor vehicle credit at 13.38 per cent. This dominance of consumer credit has drawn particular attention as it emerges when productive credit disbursements, namely working capital and investment credits, are still growing more slowly than before. In the same survey, BI also noted sectoral growth in new credit, including in the real estate sector, rental business, and corporate services with a WNB of 56.70 per cent, as well as education services at 42.62 per cent. Meanwhile, some major sectors such as wholesale and retail trade only recorded a WNB of 19.42 per cent, though still positive. Although new credit continues to grow, the survey also shows that banks tend to be more cautious in disbursing credit. This is reflected in the Lending Standards Index (LSI) for Q1-2026, which is positive at 0.15, indicating a tightening compared to Q4-2025, which was negative at -2.59. In BI’s survey methodology, a positive LSI indicates tightened credit disbursement standards, while a negative value indicates easing.