JAKARTA. Government is struggling to decrease credit interest rate to one-digit rate by the end of this year. The government is facing some challenges, including the slow growth of liquidity and the low demand for credit.
According to the survey on banking sector released by BI on 14 October 2016, the decrease in credit interest rate will be slower in the fourth quarter of 2016. The credit interest rate has potentials to decline to the ranges of 2bps to at maximum 13bps in the fourth quarter of 2016.
The credit at consumer segment is predicted to have lesser decrease rate. The BI survey mentioned that in average the consumption credit rate may decrease by 2bps to 15.37%.
Meanwhile, the interest rates of capital expenditure and investment credits will decrease by 13bps and 8bps, respectively. As a comparison, the interest rates of consumption, capital expenditure, and investment credits decreased by 39bps, 19bps, and 73bps in the third quarter of 2016.
Some bankers predicted that credit interest rate is predicted to continue to decrease during the fourth quarter of 2016. However, the bankers are willing to decrease the interest rate under some conditions.
Financial Director of PT Bank Rakyat Indonesia Tbk (BRI) Haru Koesmhargyo said that the credit for retail sector has the highest probability to secure decreases in credit interest rate. However, “The decrease will adapt with the cost of fund”, Haru told KONTAN on Saturday (15/10).
Meanwhile, PT Bank Central Asia Tbk (BCA) will observe market condition before declining its credit interest rate. BCA projects that the credit rate may decrease maximum by 25bps by the fourth quarter of 2016. President Director of BCA Jahja Setiaatmadja said that number of credit demand will affect to the decision for cutting the credit rate. “In the fourth quarter of 2016, the demands for credit in trade and industry sectors are still low,” Jahja said.
BCA claimed to implemented one-digit credit interest rate in the credits at corporate, motor vehicle, and housing ownership sectors. Director of Financial and Treasury Affairs of PT Bank Tabungan Negara Tbk (BTN) Iman Nugroho Soeko stressed that the decrease in credit interest rate is affected by the decline in costs of funds. BTN plans to cut the interest rate of housing ownership credit to one-digit level at the end of October 2016.
“The interest rate may decrease by around 10bps-20bps, assuming that liquidity is stable,” said Financial Director of PT Bank Negara Indonesia Tbk (BNI) Rico Rizal Budidarmo, BNI considers to decrease the interest rate for credit at the segments of retail and small enterprises. (Translator: Muhammad Farid)
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