JAKARTA | Bank Indonesia reported that banking credit distribution in April 2016 grew annually by only 7.7 percent to Rp4,036.3 trillion, slowing down compared to the 8.4 percent growth recorded in March 2016.
The credit slowdown was caused by the deceleration of Working Capital Credit (KMK), which grew by 4.8 percent in April to Rp1,846 trillion, lower than the 6.4 percent growth in March, according to the broad money publication released by BI in Jakarta on Tuesday (31/5/2016).
The slowdown in KMK credit was influenced by trade, hotel, and restaurant loans, which grew by 6.1 percent compared to 7.9 percent in March.
"Additionally, credit in the mining and quarrying industry declined further from minus 23.2 percent in March to minus 30.6 percent in April 2016," BI wrote.
Nevertheless, the Central Bank recorded positive growth in investment credit (KI), which increased by 12.2 percent in April compared to 11.6 percent in March.
Similarly, credit for Micro, Small, and Medium Enterprises (MSMEs) grew by 8.3 percent to Rp745.3 trillion, compared to 7.8 percent growth in March.
Meanwhile, the property credit sector remained stable at Rp631.8 trillion, growing by 11.4 percent, the same as in March. BI noted that mortgage (KPR) and apartment ownership credit (KPA), as well as construction credit, maintained stable growth at 8 percent and 14.2 percent, respectively.
At the same time, loan interest rates continued to decline. BI recorded the average loan interest rate at 12.6 percent, down 10 basis points from 12.7 percent in March.
Due to the slowdown in credit distribution, economic liquidity or broad money (M2) growth slowed to 7.1 percent in April, compared to 7.4 percent in March. (Source: Antaranews.com)