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View all search resultsBanks expect loan disbursement to rebound this year
State-owned publicly listed Bank Mandiri has forecast a 5 percent growth in the national loan disbursement this year as the economy is expected to recover across many sectors.
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Digital piety: A customer service officer provides guidance to a customer on how to conduct noncash transactions at a digital branch of Bank Mandiri Syariah in Jakarta on Thursday. The bank, which is in a merger process with Bank BNI Syariah and Bank BRI Syariah, is campaigning for digital noncash transactions such as shopping, and giving donations and alms to prevent the spread of COVID-19. (JP/Dhoni Setiawan)
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anks are expecting domestic loan disbursements to rebound this year, growing between 4 and 7 percent annually, on the back of an expected economic recovery that will catapult loan demand.
In March, domestic loan disbursement reached Rp 5.49 quadrillion (US$382.37 billion), around 3.7 percent lower than a year earlier, as businesses and consumers were still reeling from the downturn caused by the COVID-19 pandemic, according to data from Bank Indonesia (BI).
State-owned publicly listed Bank Mandiri, the second-largest lender by asset value, has forecast the country’s loan disbursement growth to rebound by 5 percent this year as a lot more industries are expected to start recovering this year.
“Some big banks have booked positive loan growth so, going forward, the demand for loans should recover in line with the recovery in confidence, followed by the recovery in investment and consumption,” Dian Ayu Yustina, the bank’s head of macroeconomic and financial market research, said in an online briefing on May 19.
The pandemic, which put business activities to a temporary halt, has forced banks to disburse fewer loans, set aside higher loan provisions and restructure loans, especially for those given to small businesses, many of which went bankrupt.
Read also: Pandemic loan restructuring scheme inches toward $70.5 billion
In boosting loan disbursements, commercial banks have lowered lending rates for consumer, investment and working capital loans albeit at a slower rate than BI’s lowering of its benchmark seven-day reverse repo rate.
