Undisbursed Loan Phenomenon Deemed Normal
Jakarta – The Financial Services Authority (OJK)’s Executive Head of Banking Supervision, Dian Ediana Rae, views the undisbursed loan phenomenon—where credit facilities remain idle at private banks—as normal within the banking business cycle.
According to her, this condition occurs repeatedly year after year. Debtors who have signed credit facilities typically already have expansion plans. However, the realisation of fund drawdowns still depends on business calculations and assessment of the economic situation.
“When I look at it, it’s something that is indeed normal from year to year. Business people will look at opportunities, that’s how it is,” she said following the Second Indonesia Climate Banking Forum in Jakarta on Thursday.
Based on Bank Indonesia (BI) data, undisbursed loans reached Rp2.506 trillion in January 2026. Dian explained that decisions on credit drawdowns are heavily influenced by business climate, investment prospects, and global and domestic dynamics. Therefore, the size of undisbursed loans does not necessarily reflect weak credit demand but rather part of debtors’ business strategy in managing expansion.
Furthermore, Dian noted that the OJK recorded quite significant credit growth last month, particularly in the corporate segment. BI recorded credit growth of 9.96 per cent year-on-year in January 2026, whilst third-party fund (DPK) growth reached 13.5 per cent year-on-year.
For the micro, small, and medium enterprise (UMKM) sector, Dian believes further encouragement is still needed to optimise growth. “So we did see quite significant growth last month, especially in the corporate sector too. As for UMKM, we still need to continue working on it. But this is certainly not something impossible,” she said.
Looking ahead, the authorities hope that improvements in global and domestic conditions will drive credit distribution to become more expansive. Several strategies that regulators have prepared are expected to begin having an impact in the coming months.