Indonesia Loan Growth Hits Near 2-Year High

Indonesia's loan growth rose by 11.51% year-on-year in May 2026, accelerating from 9.98% in the previous month. It marked the fastest annual growth since July 2024, primarily driven by investment credit (21.95%), working capital credit (8.09%), and consumer credit (5.89%). Banking resilience remained strong despite risks stemming from the Middle East conflict, supported by ample liquidity, solid capital buffers, and low credit risk. Looking ahead, Bank Indonesia expects credit growth to remain within the 8%–12% range in 2026, backed by Rp2,576 trillion in undisbursed loans, equivalent to 22.41% of total credit limits. Lending prospects are also supported by strong funding and liquidity conditions, with the AL/DPK ratio at 24.74% and third-party funds (DPK) rising 13.47% year-on-year in May. Meanwhile, lending conditions remained favorable, with the average lending rate at 8.72% and the one-month deposit rate at 4.26%.

Indonesia's annual loan growth accelerated to 9.98% year-on-year in April 2026 from 9.49% in the previous month, marking the fastest increase since February 2025. The growth was primarily driven by strong increases in investment lending (19.48%), working capital loans (6.04%), and consumer credit (6.13%). However, the central bank is still holding a sizable pool of undisbursed loan facilities totaling IDR 2,551.42 trillion, equivalent to 22.57% of the total available credit ceiling. To boost loan growth, the central bank also improved the efficiency of banking interest rates, with the credit interest rate recorded at 8.73% in April 2026 and the 1-month deposit interest rate at 4.16%. Looking ahead, Bank Indonesia expects credit growth to remain within a stable range of 8–12% in 2026.

Indonesia's annual loan growth rose by 9.49% year-on-year in March 2026, picking up from a three-month low of 9.37% in the previous month. The uptick was primarily driven by strong growth in investment lending (20.85%), working capital loans (4.38%), and consumer credit (5.88%). From the demand side, banks are still holding a sizable pool of undisbursed loan facilities totaling Rp2,527.46 trillion, equivalent to 22.59% of the total available credit ceiling. On the supply side, the ratio of liquid assets to deposits stood at 27.85% in March, while third-party funds (TPF) grew robustly by 13.55% year-on-year. Looking ahead, Bank Indonesia expects credit growth to remain within a stable range of 8–12% in 2026, supported by both demand and supply dynamics. The central bank also signaled plans to further strengthen banks’ funding capacity, including through the development of non-traditional funding instruments beyond conventional deposits, in a bid to sustain lending momentum.