OJK Discloses Causes of Banking Credit Slowdown in March 2025

Jakarta – Chief Executive of Banking Supervision of the Financial Services Authority (OJK) Dian Ediana Rae revealed that slowing credit growth in March 2025 was caused by high global uncertainty.

OJK noted that bank credit growth slowed down by 9.16 percent on an annual basis (yoy) or to Rp7,908 trillion in March 2025, which in the previous month grew by 10.30 percent yoy.

Dian explained that the moderation of credit performance in March 2025 was inseparable from the high global uncertainty, which included high global benchmark interest rates and trade wars driven by US President Donald Trump’s tariff policy, as well as the Russia-Ukraine, Middle East, and India-Pakistan conflicts.

This has an impact on the attitude of investors who tend to shift investments to assets that are considered safer (safe haven assets), or investments in sectors that are considered more stable even though the returns are not too high.

“In accordance with the Central Bureau of Statistics (BPS) release, the national economy grew by 4.87 percent in the first quarter of 2025 and contracted by 0.98 percent qtq compared to the fourth quarter of 2024. Often with this, credit performance was also moderated in March 2025 by 9.16 percent,” Dian said in a press conference, Friday, May 9, 2025.

Even so, Dian ensured that the credit risk of banks was well maintained, reflected in the ratio of non-performing loans (NPL) which decreased and stabilized below 3 percent, after the relatively stable trend of CKPN (Loan Loss Provision) coverage. On the other hand, banking liquidity conditions are still fairly well maintained despite the downward trend.

“Such conditions indicate that basically banks still have room to continue further credit disbursement,” Dian added.

Dian also emphasized that based on the discussion of business plans between the authority and banks, in general there are no significant adjustments to the credit growth target in 2025.

“Banks have the opportunity to revise the business plan target at the end of the first semester of 2025 by considering the dynamics of global and domestic developments,” Dian concluded.

Thus, OJK will continue to coordinate with the banking industry, especially if there are factors that result in the need for adjustments.

In addition, OJK together with other stakeholders who are members of the Financial System Stability Committee or KSSK also continue to coordinate with various policies to minimize the impact of this uncertainty on the financial system and the Indonesian economy as a whole.

“OJK is also actively monitoring the impact of global uncertainty on the prospects for economic growth and the domestic financial sector,” he said. (*)

Editor: Galih Pratama