Jakarta. Indonesian commercial lenders are targeting a 13 percent loan growth next year, higher than the target set by by the country's central bank and Financial Services Authority — both projecting optimistic growth on the back of stronger economic conditions and expecting positive impact from ongoing infrastructure projects.
"Their temporary business plans suggest a growth projection of 13 percent or higher. Bank Indonesia projects a 10-12 percent growth next year, just as we do," Heru Kristiyana, the executive head of banking supervision at the Financial Services Authority (OJK), said late on Tuesday (28/11).
According to OJK's data, annual loan growth had reached 8.18 percent in October, higher than 7.86 percent a month earlier.
"In November, hopefully, [the growth] will lean more toward 10 percent," Heru said, though conceding that a nine percent growth by the end of this year is more likely.
Indonesia's banking industry currently has ample liquidity to be disbursed, Bank Central Asia (BCA) president director Jahja Setiaatmadja said.
BCA, the country's biggest lender by market capitalization, however, prefers to keep its business plan moderate by projecting a loan growth of around 9-10 percent next year.
"If the economy comes good next year, we can grow 15 percent, 17 percent or even 20 percent because we have the capital, the capacity and manpower," Jahja said. "But the problem is on the demand side, so we will remain conservative for the time being."
According to Jahja, next year's loan disbursement will rely on consumption and infrastructure loans thanks to its elasticity to changes in interest rates.
"So, just like on a mortgage; we drop the rate and customers flock to it, propping up the loan. The hard part is [disbursing] capital and investment loans [...] mortgage or car loans are easy, people need it so they'll take it," he said.
State-controlled lender Bank Rakyat Indonesia is more optimistic according to its consumer director Handayani.
"We project a double digit loan growth next year because the economy is expected to do better," she said.
President Joko "Jokowi" Widodo said separately on Wednesday he is optimistic the Indonesian economy will grow 5.3-5.4 percent next year. That is higher than five percent in 2016 and 5.1 percent expected this year.
Bank Indonesia is also preparing new rules to boost loan growth by ensuring lenders are able to manage their liquidity better.
The authorities will start easing loan to value ratio rules — which limit the amount of loans a lender could offer relative to its customer assets — in some areas of the country and relax its reserve requirements.