Financing from the Capital Market Cross The Role of Banking
By : Herry Barus And Aldo Bella Putra | Friday, December 29 2017 - 23:00 IWST

Gubernur BI Agus Martowardojo (Foto Rizki Meirino)
INDUSTRY.co.id - Jakarta - The contribution of financing from banks to the domestic economy is lower compared to the capital market contribution, as indicated by the non-bank instrument financing portfolio that grew 24.1 percent annually (yoy), while credit grew by 7.47 percent (yoy) until November 2017.
Governor of Bank Indonesia (BI) Agus Martowardojo said here on Thursday (28/12/2017) that the growth of financing through capital market instruments reached Rp276.5 trillion during January to November 2017, or in contrast to the growth of bank credit until the end of the year failed to grow double digits.
The Central Bank estimates that bank credit growth will only reach eight percent (yoy) by the end of 2017.
"In terms of loan portfolio, we see that there are still challenges, but financing through the capital market as of November 2017 is Rp276.5 trillion or up 24 percent compared to November 2016," said Agus.
Agus detailing the most widely used financing instruments in the capital market is bonds with absorption of funds reached Rp162, 7 trillion. Then stock instruments amounted to Rp73.8 trillion and medium term notes, certificates of deposit, and "Promissory Notes" which cumulatively amounted to Rp40 trillion.
The Central Bank previously explained that the growth of bank credit is still slowing is the demand for sluggish credit from corporate customers and individuals. This is evident from the excess liquidity of banks deposited in BI accounts and also the high level of unused bank loans (undisbursed loans).
According to data from the Financial Services Authority (OJK), as of the third quarter of 2017, "idle" banking credits reached Rp 1,400 trillion, up 9.62 percent year-on-year compared to 2016. Other causes of the credit crunch are a banking attitude that is still cautious to channel credit for the improvement of assets.
Chairman DK OJK Wimboh Santoso as reported by Antara previously said there is actually a positive impact of high financing from the capital market than banks. This is because it represents the long-term financing instruments of the financial services industry, especially for infrastructure projects that have become more diverse.
Thus, the financing of the economy depends not only on bank loans.
However, Wimboh expects banks to continue to optimize their intermediary function by channeling credit to specific sectors and segments.
Read Also
SKB Food Collaboration with Bank Mandiri Facilitates Access to MSME…
Sri Mulyani: 2023 Budget Must Stay Flexible in Facing Global Economic…
Robocash Group reached 2 BN USD of disbursement and issued audited…
FSB Indonesia launches Fundo, Asia’s First and Indonesia’s Only…
TMRW by UOB launches TMRW Pay, An E-commerce loan To Help Consumers…
Today's Industry

Rabu, 29 November 2023 - 20:06 WIB
President Jokowi Joins Tree Planting Activity in Pulogadung Industrial Area
President Joko “Jokowi” Widodo Wednesday (11/29) participated in the Joint Tree Planting Movement at the PT Jakarta Industrial Estate Pulogadung (JIEP) Forest in the Pulogadung Industrial…

Rabu, 29 November 2023 - 20:02 WIB
President Joko 'Jokowi' Widodo has called on people across the country to promote tree-planting movement as part of efforts to tackle climate change and global warming.
President Joko “Jokowi” Widodo has called on people across the country to promote tree-planting movement as part of efforts to tackle climate change and global warming. “This tree-planting…

Rabu, 29 November 2023 - 19:56 WIB
Intellectual Property Drives Technological Innovation to Address Climate Change
The Ministry of Foreign Affairs of the Republic of Indonesia and the Permanent Representation of Indonesia (PTRI) to the United Nations, World Trade Organization, and Other International Organizations…

Rabu, 29 November 2023 - 19:50 WIB
The Indonesian Team Outstanding Achievement at the Mining Emergency Response Competition (MERC)
In the Mining Emergency Response Competition (MERC) held at Langley Park, Perth (24-26/11), the INA Garuda Mine Rescue Team achieved remarkable success for Indonesia. The INA Garuda Mine Rescue…

Rabu, 29 November 2023 - 19:45 WIB
Minister of Trade and Deputy Minister of Foreign Affairs Meets Discussed the Progress of the IEU-CEPA Negotiations
Minister of Trade, Zulkifli Hasan received a visit from the Deputy Minister of Foreign Affairs, Pahala Mansury at the Ministry of Trade Office, Jakarta, Wednesday (29 Nov). The meeting discussed…
News Comment