Indonesian banks gave out more new loans in Q1
But the number is lower than in Q4 2023 and will slow down further in Q2.
Banks disbursed more new loans in Q1, with the weightend new balance (WNB) growing to 60.8% during the period, according to the latest survey by the Bank Indonesia (BI).
This extends the 96.1% WNB reported for Q4 2023.
Respondents expect the growth to further slow in Q2 2024, with an expected WNB of 57.6%. This comes as the banks surveyed anticipate tighter lending standards in the second quarter, notably lending rates and collateral requirements.
Respondents' main priority in disbursing new loans in Q2 2024 remained the same as in previous periods, namely working capital loans, followed by investment loans and consumption loans, the central bank added.
The Electricity, Gas, and Water sector (49.8% WNB) recorded the highest growth in new credit disbursement, followed by the Health Services & Social Activities sector (42.4% WNB). The Personal Services Serving Household sector (23.5% WNB) rounded up the top three.
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In terms of consumption loans, respondents said that the distribution of Home Ownership Loans (KPR)/ Apartment Ownership Loans (KPA) is still the top priority, followed by Multipurpose Loans and Motor Vehicle Loans (KKB), BI found.
By sector, banks expect to disburse the most loans in the manufacturing sector, the wholesale and retail trade sector, and the financial intermediary sector.