BI Reports Papua's NPL Stable at 2.67% in Q1 2026, Credit Growth Slows

Bank Indonesia’s (BI) Papua Representative Office stated that the stability of the financial system in Papua and the New Autonomous Regions (DOB) was maintained during the first quarter of 2026, with the non-performing loan (NPL) ratio holding steady at 2.67%. Warsono, Head of the Bank Indonesia Representative Office for Papua Province, said that banking intermediation performance in the region remains healthy despite a slowdown in credit growth rates. “Regional financial stability in the first quarter of 2026 was maintained, reflected by an NPL of 2.67%, which remains below the safe threshold,” he said on Thursday. He explained that banking credit distribution during the period grew by 8.83% year-on-year (yoy), a deceleration compared to the previous quarter’s growth of 10.08% yoy. “Credit growth was mainly supported by investment credit, which grew significantly by 26.94% yoy, and consumer credit, which increased by 9.71% yoy,” he stated. The growth in consumer credit was predominantly driven by an increase in housing loans (KPR). Meanwhile, credit for the micro, small, and medium enterprises (MSMEs) sector showed improvement, growing by 0.91% yoy after experiencing a contraction of 0.99% in the previous quarter. “On the funding side, third-party funds (DPK) grew by 8.42% yoy, higher than the 6.54% growth recorded in the previous quarter,” he added. The increase in DPK primarily came from current accounts and savings, with the growth in current accounts driven by an increase in government sector deposits. “We assess that this condition indicates the banking intermediation function in Papua and the DOB is functioning well, supporting the resilience of the regional financial sector in a sustainable manner,” he concluded.