TEMPO.CO, Jakarta - This year's credit growth is projected to remain sluggish. Banks' efforts to boost credit distribution are faced with low demand and high risks of default due to the impact of the Covid-19 pandemic.
Accumulatively, bank credit recorded negative growth, down by 2.7 percent in 2020.
"Credit growth is not expected to increase significantly, especially in the first half of 2021," Bank Permata chief economist Josua Pardede told Tempo on Thursday, January 28. Challenges that hinder the lending mainly come from social and economic activity restrictions, and the fact that the vaccination program is only at its early stages.
Meanwhile, Financial Services Authority (OJK) chief Wimboh Santoso said bank loan disbursement will rebound this year. The OJK projects a 7-percent credit growth, supported by the recovery of businesses and MSMEs with the help of government incentives.
Meanwhile, Bank Indonesia projects credits to grow between 7 and 9 percent in 2021. BI Governor Perry Warjiyo said that economic recovery progress supports the government's efforts to improve credit disbursement.