Expert: SME, manufacturing credit needs revival for double-digit growth
Jakarta (ANTARA) - Chief Economist at Permata Bank, Josua Pardede, views that credit growth above 10 per cent on a sustainable basis cannot rely solely on investment credit to large corporations, thus requiring a broader recovery across various types of credit.
“There must be a broader recovery in working capital credit, trade, manufacturing, SMEs, household consumption, and the services sector,” Josua said when contacted by ANTARA in Jakarta on Wednesday.
He reminded that if pressure on the rupiah and energy continues, businesses tend to hold back on expansion and banks will remain cautious, so credit growth is more likely to stay in the high single digits.
In line with first-quarter 2026 economic growth of 5.61 per cent year-on-year (yoy), Josua assesses that Bank Indonesia’s (BI) projection for banking credit growth in 2026 in the range of 8-12 per cent remains realistic.
However, he believes the greater chance of realisation lies in the lower to middle range. He estimates the baseline credit growth for 2026 is more likely to be in the 8.5-9.5 per cent range.
In terms of composition, credit growth is not yet fully even. Investment credit grew strongly at 20.85 per cent (yoy), but working capital credit only grew 4.38 per cent (yoy) and consumption credit 5.88 per cent (yoy).
Josua assesses that this development indicates that credit is still more supported by certain investment projects and relatively strong corporations, while financing for daily business operational needs has not moved quickly.
“Meanwhile, working capital credit usually better reflects the pulse of daily real sector activities. Therefore, even though the first-quarter economic growth figure is quite high, banks are likely to remain selective, especially for sectors where profit margins are pressured by import costs, energy, logistics, and rupiah depreciation,” he explained.
In general, he assesses that credit performance in March 2026 shows that intermediation is still growing, though not as strong as the available liquidity.
Third-party funds (DPK) grew much higher, at 13.55 per cent (yoy), with the liquid assets to DPK ratio (AL/DPK) at 27.85 per cent.
On the other hand, undisbursed loan facilities are also still very large, reaching Rp2,527.46 trillion or 22.59 per cent of the credit ceiling.
Josua views that this indicates the issue is not a lack of funds at banks, but not all businesses are ready to draw down credit and not all requests are deemed sufficiently viable by banks.
“So, loose liquidity is a necessary condition, but not a sufficient one to drive credit,” he said.
Regarding the placement of Excess Budget Balance (SAL) in banking, he assesses that its effectiveness so far is more clearly seen on the liquidity supply side, not yet on accelerating credit.
Government fund placements in banks can strengthen banks’ ability to disburse credit, reduce funding cost pressures, and provide room for banks to keep credit interest rates from rising.
However, if credit demand from businesses is not strong or banks still assess debtor risk as high, additional liquidity will tend to accumulate on bank balance sheets.
“Therefore, the effectiveness of SAL should not be judged merely by how much funds are placed, but must be seen from how much new credit is created, which sectors receive it, how many jobs are impacted, and whether credit quality remains maintained,” Josua said.