Indonesia Loan Growth Stays Robust

Indonesia’s loan growth rose 13.36% year-on-year in August 2026, following a 13.58% increase in July, which had marked the strongest pace since August 2014. By usage, the latest result was led by investment loans, followed by working capital and consumer loans. The positive lending trend was underpinned by Bank Indonesia’s continued optimisation of the Macroprudential Liquidity Incentive Policy (KLM), with incentives reaching Rp461.2 trillion as of early September. Lending appetite also remained firm, while strong banking resilience continued to provide room for credit expansion. The central bank expects loan growth to reach 8–12% for the full year, reflecting its accommodative macroprudential stance to support the economy.

Indonesia's loan growth increased by 13.58% year-on-year in July 2026, accelerating from a 12.67% rise in the previous month and marking the strongest pace since August 2014. The acceleration was supported by accommodative macroprudential policies, continuously pursued through the optimization of the Macroprudential Liquidity Incentive (KLM) policy to encourage increased bank lending and financing to priority sectors. As of the first week of August 2026, KLM incentives obtained by banks totaled IDR 446.5 trillion. The growth was also supported by the banking sector's high Capital Adequacy Ratio, which stood at 23.70% in June 2026. Meanwhile, the aggregate banking non-performing loan ratio remained low at 2.09% (gross) and 0.82% (net) in June 2026. The ratio of liquid assets to third-party funds remained stable at 23.10% in July 2026.

Indonesia's loan growth rose by 12.67% year-on-year in June 2026, accelerating from an 11.51% increase in the previous month and marking the strongest pace since April 2024. The increase was driven by investment credit (24.90%), working capital credit (8.94%), and consumer credit (5.75%). Banking resilience remained solid despite heightened global uncertainty, supported by strong capital buffers, low credit risk, and adequate liquidity. Looking ahead, Bank Indonesia expects credit growth to remain within the 8%–12% range in 2026, backed by Rp2,490 trillion in undisbursed loan facilities, equivalent to 21.52% of total credit limits. Lending prospects are also supported by steady third-party fund growth of 10.21% year-on-year and favorable interest rate conditions. Meanwhile, the banking industry's liquid assets-to-deposits (AL/DPK) ratio stood at 23.08% in June, while the average lending rate was 8.81% and the one-month deposit rate was 4.76%.