fter the Rp 200 trillion (US$12 billion) injection of third-party funds into state-owned banks, credit disbursement remains concentrated in corporate lending, while loans to small and medium enterprises (SMEs) remain subdued. Analysts attribute this to persistently weak demand in the SME sector amid a stagnating economy.
In hopes of maintaining banking liquidity and supporting economic growth, the Finance Ministry transferred a significant amount of state funds previously held at Bank Indonesia (BI) to state-owned lenders.
Bank Rakyat Indonesia (BRI), Bank Negara Indonesia (BNI) and Bank Mandiri each received injections of Rp 55 trillion, while Bank Tabungan Negara (BTN) and Bank Syariah Indonesia (BSI) received Rp 25 trillion and Rp 10 trillion, respectively.
Finance Minister Purbaya Yudhi Sadewa emphasized that the funds must circulate within the banking system through loan issuance to the public in order to drive growth.
"We are asking banks to use the funds not to lend to conglomerates or for dollar purchases, as doing so could weaken the rupiah," Purbaya said at an offline event on Tuesday.
However, he stressed that the government would not intervene heavily in how banks allocated the funds, noting that they had sufficient "expertise" to channel credit effectively to productive sectors.
Purbaya explained that the injection should incentivize lending because banks must pay 4 percent annual interest to the Finance Ministry for holding the funds, which would reduce profits if the money remained idle.