Credit Interest Rates Struggle to Decline, DPR Highlights Bank Special Rate Practices

Commission XI of the DPR has highlighted that many banks continue to offer special rates, making it difficult for credit interest rates to decline.

Muhammad Kholid, a member of Commission XI from the PKS faction, stated during a working visit to his constituency that he frequently finds that MSME credit growth is stagnant due to the ongoing practice of special rates.

“One finding I often encounter during working visits to various regions is that the problem is not just declining MSME credit, but there is also the issue of expensive funding. Why? Because banks are competing for expensive funds because the practice of special rates from institutions or depositors has not yet been regulated,” Kholid said during a working meeting of Commission XI with Bank Indonesia (BI) officials on Monday (28/09/2026).

He subsequently questioned the transmission of policies among members of the Financial System Stability Committee (KSSK) to ensure they are felt by MSME players. “This can be discussed within the KSSK: how monetary policy transmission can also be felt by MSMEs,” Kholid explained.

As a result of these special rate practices, he believes lending rates are failing to drop, making credit distribution sub-optimal due to high interest levels. “It could be that the problem lies in expensive funding, because institutional depositors are requesting special rates in large volumes, making it difficult to lower the lending rate,” Kholid added.

Meanwhile, Thoriq Majiddanor (also known as Jiddan), a member of Commission XI from the Nasdem faction, highlighted that the public is not benefiting because banking credit interest rates remain high.

“BI states that banking liquidity is sufficient, but at the same time acknowledges that liquidity is segmented, with credit growing at 13.62%. We must ensure that while Rp 123 trillion successfully deepens the market, the public does not continue to face lending rates that are difficult to reduce,” said Jiddan.

He noted that because banks are still competing for funding, the impact is that MSME credit growth has only reached 1.62%. “The lending rate is difficult to lower because certain banks are still competing for funding, resulting in MSME credit growing by only 1.62%, while corporate credit has grown by 22.10%,” Jiddan explained.