BI: Beware of NPL in Construction Sector
11 December 2014 03:02 WIB
TEMPO.CO, Jakarta – Bank Indonesia (BI) noted that the non-performing loan (NPL) ratio of the banking industry has increased during the first half of this year. "This is the result of unfavorable global and domestic economic conditions," read the Financial Stability Review per September 2014 released by BI yesterday.
The central bank noted that as of the first half of 2014, the gross NPL ratio of the banking industry stood at 2.16 percent, up from the previous semester's 1.77 percent.
The highest NPL is found in loans to the construction sector (4.24 percent), followed by loans for the trade sector 2.92 percent.
Enny Sri Hartati, an economist with the Institute for Development of Economics and Finance (Indef), said the government was keep an eye on the many cases of bad credits in the construction sector until the end of this year and early next year. The reason, she said, is that the government's promise to boost infrastructure projects is responded positively by contractors, but the companies may well not have the financial ability to embrace the policy
"Therefore, banks must be more selective in choosing debtors," she said.
ALI HIDAYAT | MARTHA THERTINA | JAYADI SUPRIADIN
