New Loans Disbursed by Indonesian Banking Industry Expected to Grow in Q2 2023

The latest Financing Supply and Demand Survey, conducted by Bank Indonesia (BI) in May 2023, indicated increasing new loan disbursements by the banking industry

IDXChannel - The latest Financing Supply and Demand Survey, conducted by Bank Indonesia (BI) in May 2023, indicated increasing new loan disbursements by the banking industry compared with conditions one month earlier.

This was reflected by an increase in the Weighted Net Balance (WNB) to 82.6% in May 2023 from 68.9% in April 2023. 

"The main affecting factors of new loan disbursements in the reporting period were customer demand, the monetary and economic outlook and the level of business competition between banks," BI Communication Department Executive Director Erwin Haryono said in a media release on Tuesday (20/6/2023).

"Overall, respondents predict an uptick on the supply-side of new loan disbursements from the banking industry in the second quarter of 2023," he stated.

The latest Survey also indicated modest growth of corporate demand for financing in May 2023, with the WNB moderating to 12.5% from 19.8% in April 2023. 

Demand for financing was primarily sourced from internal funds, which remained dominant, yet decreased on the previous period.  
Meanwhile, demand for financing sourced through domestic banks tended to increase.  In addition, financing through committed undisbursed loans also decreased on the previous period.

In terms of households, demand for new financing was observed to accelerate slightly in May 2023, with commercial banks remaining the primary source of additional household financing in the form of multipurpose loans.  

In addition, households also relied on other sources to meet their financing needs, including cooperatives and leasing. (WHY)