Wholesale lending to lift Indonesian banks’ loan growth

Average loan growth is expected to rise to 9% in 2026.

Indonesian banks’ loans are expected to rebound in 2026, driven by wholesale loans even as micro and consumer loan segments remain a problem.

Large banks’ average loan growth is expected to come at 9% in 2026, compared to the estimated 8% in 2025, said CGS International (CGSI).

Wholesale loans should remain the main growth engine, with CGSI’s channel checks finding “a continuous build-up in loan facilities in recent months.” Sectors with strong loan pipelines include healthcare, minerals, telecommunication, and transport & logistics.

However, CGSI cautioned on the micro and consumer loan segments.

“As weak macroeconomic conditions seem to be bottoming out, we believe that both the corporate and commercial loan segments should once again be the primary drivers of system loan growth in 2026F,” CGSI said in a report published on 9 December 2025.

Indonesia’s biggest banks saw their weak loans improve since the pandemic era. From 23.4% of loans at risk in 2020, there are now just 9.7% as of June 2025, according to data from S&P.

The rebound follows a slowdown in loan growth in the last twelve months on the back of a decline in wholesale and retail trade. In July 2025, investment loans slowed to an 11.8% year-on-year (YoY) growth from 14.6% in April 2024, according to data from Bank Indonesia (BI). Working capital loans only grew 2.8% YoY from the 12.4% YoY growth in April 2024.

“We gather from our discussions with the banks that the slowdown in system loan growth since early 2025 was primarily driven by the weak macroeconomic outlook throughout the period, which led many corporations to adopt a more prudent “waitand-see” approach rather than grow aggressively,” said CGSI analysts Henry Noverdanius, Owen Tjandra, and Elizabeth Noviana.

Investment loan growth has since picked up with a 14.4% YoY rise in September 2025. This follows an IDR200t injection by the Ministry of Finance into state-owned banks during the same month.

One thing to watch for is the impact of Kopdes lending on banks. Introduced in late 2025, the new credit scheme for village and urban cooperatives is expected to have a so-far immaterial impact on local banks— but the impact will become “more meaningful and riskier” as disbursement scales up, warned UOB Kay Hian (UOBKH).