Corporate credit interest rate may be one digit

JAKARTA. The liquidity squeeze and The Fed’s plan to increase interest rate will decrease the chance for reducing the credit interest rate. However, the bankers will reduce the corporate credit rate to one digit.

Director of Banking I Business of PT Bank Negara Indonesia Tbk (BNI) Herry Sidharta said, the low credit rate will at least trigger the credit demands, which have been sluggish due to the economic slowdown. “It is expected that the credit interest rate will further decrease by minimum 50 bps,” Herry told KONTAN, last weekend.

As of December 2016, the prime lending rate (SBDK) of BNI’s corporate credit dropped by 50 bps to 10.25% compared with the same period in 2015.

Vice President of PT Bank Mandiri Tbk Dikdik Yustandi said, the bank is still expecting to provide low interest rate as long as the costs of funds are also low. “To date, the corporate credit interest rate in average is around 10%, no more than 12%-13%,” he said.

According to Dikdik, providing low interest rate to corporate credit segment is a kind of challenge, on the grounds that this type of credit has a long tenor, up to 10 years. Conversely, the banking funds have a shorter tenor, while the prime lending rate of Bank Mandiri’s corporate credit stands at the level of 10.25%.

Institutional Director at PT Bank Rakyat Indonesia Tbk (BRI) Kuswiyoto said that BRI’s corporate credit rates are ranging from 9% to 11%, depend on the risks of each debtor. “The ranges of corporate credit rates in 2017 will remain the same with the last year,” Kuswiyoto said.

Corporate credit target
Bank Mandiri targets to have 11%-16% corporate credit growth, which is supported by infrastructure projects, such as toll road. In every year, the needs of infrastructure constructions reach Rp 700 trillion. “We are targeting to obtain 5% of that pontential,” Herry said.

Meanwhile, BRI is targeting to boost the corporate credit growth by 15%-16% that will be mainly supported by state owned enterprises’ projects. BRI is also targeting to increase the infrastructure credit by 30% to Rp 58.6 trillion in 2017. In the last year, the infrastructure credit was targeted to grow by 50% to Rp 45.11 trillion.

Bank Mandiri sets the target of corporate credit growth at 14%-15% to Rp 250.8 trillion-Rp 253 trillion. Aside of infrastructure sector, Bank Mandiri also targets to allocate the corporate credit to consumer goods, plantation, and commodity sectors. (Muhammad Farid/Translator)