Bank Loan Interest Rates Drop, Including Mortgages

Jakarta, CNBC IndonesiaBank Indonesia (BI) revealed that bank lending rates have decreased, in line with the low BI 7-Day Reverse Repo Rate (BI7DRR) which is now at 3.5%.

BI Governor Perry Warjiyo revealed that the basic lending rate (SBDK) for banking has continued to decline by 155 basis points (bps) since June 2020 to 8.28% in June 2021.

The decline was due to a decrease in the Cost of Funds for Credit (HPDK) and overhead costs (OHC), while profit margins continued to increase in the State-Owned Commercial Banks (BUMN) and National Private Commercial Banks (BUSN) groups.

Likewise, the interest rates for new mortgage loans have decreased, thereby encouraging increased growth in housing loans (KPR).

“The decline in the SBDK KPR by 212 bps in the period June 2020 to June 2021, followed by a decrease in the interest rate for new mortgage loans by 124 bps in the same period,” he said in a virtual press conference, Thursday (19/8/2021).

Perry hopes that banks can continue to lower lending rates to encourage credit, especially to the business world and the public for productive activities.

Based on his records, new lending continues to increase, especially mortgages which grew 6.79% in July 2021 in line with high demand for mortgages. Likewise with MSME loans.

“MSME credit grew positively by 1.93% in July 2021, although it was slightly weaker compared to the previous month due to the limited mobility of the people,” he said.

In order to continue to encourage economic and financial inclusion as well as strengthen the role of MSMEs in the national economic recovery, BI will issue a RPIM policy that will take effect on September 1, 2021.

Perry said the banking capital adequacy ratio (CAR) in June 2021 remained high at 24.30%, and the ratio of non-performing loans (NPL) was maintained at 3.24% (gross) and 1.06. % (net).

In the midst of loose liquidity conditions and lower interest rates for new loans, banking intermediation continued positive growth, although not yet strong, at 0.50% (yoy) in July 2021.

[Gambas:Video CNBC]

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