By Eko B. Supriyanto, Chairman of Infobank Media Group
Finance Minister Purbaya Yudhi Sadewa said that bankers are playing it safe. They are called lazy banks. They do not dare to issue loans, even though they have been flooded with liquidity. It is a “credit drought” during the rainy season of liquidity. Imagine this. The government has injected Rp276 trillion in liquidity into the banks of the State-Owned Banks Association (Himbara), yet credit remains stagnant. In fact, the number of undisbursed loans is growing. And, in the end, the government withdrew Rp75 trillion.
According to Purbaya, the slow credit growth is because bankers are playing it safe. They don’t dare to “pee” credit more often. However, if we look at the increase in undisbursed loans, it is not the bankers who are not disbursing credit, but the business world that is putting the brakes on disbursement.
There are many factors, one of which is the massive criminalization of bad loans in the regions. Also, the business world seems confused by the various players in the big business world.
Moreover, the withdrawal of Rp75 trillion from banks is a signal that the state finances are in need of money to finance expenditures. Fiscal discipline has loosened a little, because almost all government programs require funding.
Just take a look! The 2025 State Budget (APBN) deficit, which reached Rp698.1 trillion or 2.92 percent of Gross Domestic Product (GDP), is not just a statistic. It is a reflection of the political choices and economic paradigm adopted by the government. This figure, which is close to breaking the psychological threshold of 3 percent, should be read as a serious warning sign, not merely a consequence of difficult external circumstances.
Final Fiscal Test
According to a limited discussion by the Infobank Institute, there are three important things about the fiscal condition that is entering a critical phase.
First, this deficit structure reveals a fundamental imbalance between spending ambitions and fiscal capacity. State revenue realization only reached 91.7 percent of the outlook, with very disappointing tax revenue performance (87.6 percent of the target).
This is clearly an indicator of the failure of tax reform and the weakness of the productive economic base. On the other hand, state spending was realized at 95.3 percent of the outlook. This pattern is consistent with the expenditure-driven, rather than revenue-driven, nature of the budget. This means that the government is more agile in spending than in mobilizing revenue. In political terms, this is a choice to meet short-term demands (through priority program spending) at the expense of long-term fiscal sustainability.
Second, the narrative that deficits are necessary to protect the economy from “morat-marit” is a dangerous argument if it is not accompanied by disciplined execution. The Minister of Finance’s statement that a zero deficit can be achieved by cutting the budget, but that it would harm the economy, is only half true. The other half, which is critical, is: what is the quality and productivity of the spending that protects the economy?
According to the Infobank Institute, the problem is that government spending is not yet fully productive. Many “priority” programs are more populist and consumptive in nature, rather than investment-oriented. Public money is spent to create artificial growth that depends on consumption, rather than to build a solid foundation of productivity such as research, quality education, and efficient logistics infrastructure.
Third, the most serious consequence of this deficit is the narrowing of future fiscal space due to the debt burden. According to Infobank data, in 2026, maturing debt will swell to nearly Rp834 trillion. This is clearly a fiscal trap. Today’s deficit will be paid for with new debt and interest in the future.
Now, in the context of geopolitical uncertainty and high global interest rates, the cost of rolling over this debt will be very expensive. Fiscal space for maneuvering in times of crisis will become increasingly narrow as the budget is burdened by debt payments. We are borrowing future prosperity to spend today, with no guarantee that it will be there.
A deficit of 2.92 percent is a warning sign. It reminds us that we are walking on the edge of a fiscal cliff. Without fundamental corrections in budgetary policy, without strict discipline, and without a clear long-term economic vision, the green light for a fiscal crisis will eventually turn on. We must not allow this burden to be passed on to future generations simply because of our inability to make the right and courageous political choices today, except for blind spending.
The final test of fiscal discipline must be carried out. From a political economy perspective, this is a symptom of a government caught between the demands of populist legitimacy and the obligation to maintain macroeconomic stability. The pressure to demonstrate performance through visible projects often trumps considerations of efficiency and sustainability.
The ruling political coalition needs the distribution tool of government spending to maintain support. Meanwhile, optimal tax revenue is often hampered by resistance from interest groups (business elites) and bureaucratic inefficiency.
Lazy Banks, Bad Debt Crimes, and Confusion in the Real Sector
Where there is sugar, there are ants. If the business world is thriving, banks will be swarmed by ants. According to Infobank Research Bureau records, the increase in money supply with the intention of boosting economic growth has resulted in an increase in undisbursed loans.
Just look at November 2025, when the figure had skyrocketed to Rp2,509.4 trillion. This is an increase from Rp2,372.1 trillion or 22.71 percent in August 2025. Clearly, the business world is uncertain about its prospects. It is hesitant and uncertain about recent political developments.
Liquidity is no longer an issue. However, the credit growth figure (November 2025) from the same data shows a growth of 7.74 percent. This figure is lower than the same period in 2024, which was 10.79 percent. So, it can be said that apart from the low demand for credit, there has actually been a sale and purchase of credit from Himbara banks to smaller banks with the lure of lower interest rates and higher credit limits.
This simple question requires a complex answer. We must dare to go beyond the technical-monetary narrative. This is no longer a matter of the price of money (interest rates). It has entered the complex realm of political economy. There is trauma and power at play. Signals sent by the government often scare the business world. Large business groups (conglomerates) are beginning to fear extortion, both “official” and “unofficial.”
Clearly, this has led to uncertainty, fear, confusion, and hesitation. As a result, the real sector is uncertain, hesitant, and has lost direction, confidence, and is adopting a wait-and-see approach. So, the root cause lies in the real sector. In short, it is not just sluggish, but structurally paralyzed. The imaginary sector controlled by the government offers no room for hope. So it is better to “stay quiet” for now rather than expand.
Our real sector is suffering from an acute chronic disease. Regulatory uncertainty and ever-changing policies have created investment uncertainty. Competitiveness is increasingly eroded by high logistics costs, legal uncertainty costs, and bureaucratic barriers, fostering deep concerns.
Entrepreneurs ask: why build new factories or expand if the business climate itself is unfriendly and full of pitfalls? This is no longer a matter of the usual business cycle, but of an existential fear of survival. The result is predictable. Hesitation to make investment decisions, doubts about the future, loss of enthusiasm for business. And—most dangerously—loss of confidence in the state’s ability to provide a fair and stable business ecosystem.
The most rational reaction in such conditions is to wait and see, or more extremely, to move assets and activities to a more predictable jurisdiction. This simple logic is understood by every entrepreneur, but seems to be less understood by policy makers in their “ivory towers.”
As a result, the business world often hears “We will… We will and We will.” Without being able to be interpreted by the technocrats surrounding the President. Then, it disappears again, swallowed up by the same words with a different nuance, “We Will… We Will.”
According to a limited discussion by the Infobank Institute, on the credit provider side (banks), there is an important issue that is just as acute. What is it? There is a collective trauma among bankers regarding bad debt. This is not an ordinary trauma. It is a trauma exacerbated by the criminalization of credit failure. When a banker can be threatened with criminal charges for a problematic loan—which is an intrinsic risk in the banking business—the instinct for self-defense takes over. In fact, even the debtor can be charged with causing harm to the state.
Why take the risk of channeling credit to dynamic but risky sectors (such as MSMEs or startups) if the consequences could lead to imprisonment? It is safer to “bury” money in Government Securities (SUN) or place it in Bank Indonesia (BI) through its monetary instruments. High levels of undisbursed loans are a reflection of this extreme risk aversion psychology. Banks have become “very cautious spectators” rather than “players” in the economic arena.
In such a business environment, the accusation of lazy banks is not always true. Banks must play it safe by purchasing Government Securities (SBN). This “laziness” has long been prevalent among bankers. And, they are becoming increasingly lazy due to the uncertain business environment and the criminalization of bad debt.
So, even though bankers are lazy or lazy banks, they certainly cannot be blamed solely for this. The government must do its homework, which is to improve the business climate and, most importantly, ensure that bad debt is not treated as a criminal offense. If law enforcement agencies (APH) have key performance indicators (KPI) based on the number of cases, the easiest KPI is to investigate bad debt from civil to criminal cases.
Moreover, law enforcement agencies see the problem when the loan is already non-performing. However, bankers see it when the business is doing well and has prospects. Clearly, this is different, and the government must resolve this issue. Who would want to, for example, grant a loan in 2012, only for it to become non-performing in 2025? Meanwhile, the loan decision-makers have already retired, but they are still being dragged into accountability for their decisions.
The current lazy banking is different from before. In the past, there were still signs that credit was being disbursed more aggressively. Now, signs of credit disbursement still exist, albeit small, and the real sector is also fearful. Yes, bankers are afraid, and the real sector is equally afraid—terrified of being criminalized. Articles that benefit other parties are a specter haunting bankers.
Ultimately, amid the current fiscal discipline test, which is now in the yellow zone, the massive criminalization of bad loans, and accusations of lazy banking, it is certainly not solely the fault of bankers. The government must do its homework, which is to create a conducive business environment. And, be prepared, because with a fiscal deficit approaching 3 percent, there is a possibility that the remaining government funds of Rp201 trillion will not be taken again.
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