By Eko B Supriyanto, Editor-in-Chief of Infobank Media Group
TAKE A MOMENT TO REFLECT. This isn’t about politics or the volatility of chili prices in the market—that’s nothing new. But it’s about something deeper, something that drives the pulse of the economy: credit. Or more precisely, the reluctance of credit to flow. Just like in a healthy body, the kidneys must filter smoothly. But today, even though credit has grown by 9.96 percent over the past year, there are worrying signs. Like a sick kidney blocked by stones, it struggles to function.
Last year, according to Infobank Institute records, credit grew by 9.63 percent, with a significant influx of credit toward the end of the year directed to Agrinas for the Merah Putih Village Cooperative (KDMP) amounting to Rp150 trillion. Clearly, credit growth jumped immediately. It seemed as though credit was flowing freely. In reality, this was directed toward KDMP, whose impact remains a major question mark, as the credit was primarily allocated for office construction, infrastructure, and Indian-made vehicles for KDMP.
Data from the Financial Services Authority (OJK) as of January 2026 has just been released. It’s only been one month into 2026, but the reports are already telling the story. Credit grew by 9.96 percent year-over-year. This figure is indeed a slight increase from December 2025’s 9.63 percent. But don’t clap too soon. In simple terms, this is clearly like someone riding a bike up a hill—it looks like they’re moving, but they’re already gasping for breath.
Total credit reached Rp8.557 trillion. Is that a lot? Yes. But look deeper. Working Capital Loans (KMK)—the lifeblood of small and medium-sized enterprises, which start up production machinery every morning—grew by only 4.13 percent. Meanwhile, inflation in raw material costs never stops.
This is what we might call the “sick kidney syndrome.” Blood (money) is flowing, but not freely. The channels are clogged. The flow is weak. The pain isn’t just in the banking sector, but throughout the entire Indonesian economy.
Meanwhile, investment credit did jump by 22.38 percent. This is clearly good news. It means some are still daring to build factories and buy new machinery. But consumer credit grew by only 6.58 percent. People are holding back on spending. They prefer to hold onto cash.
This is where the irony lies. On one hand, there’s a term in monetary economics that might sound funny: “wet sheep’s wool.” This describes Third-Party Funds (TPF). It’s like a sheep’s fleece that’s just been caught in the rain—wet, heavy, but hard to process. TPF grew by 13.48 percent to Rp10.076 trillion. Money is piling up in banks. But who’s borrowing? The kidneys aren’t working. The “wet sheep” fleece remains unprocessed.
Take a look. According to the same data, liquidity is abundant. The ratio of liquid assets to DPK is 27.54 percent, far above the safe limit of 10 percent. In fact, the Liquidity Coverage Ratio (LCR) stands at 197.92 percent—nearly double the requirement. Clearly, banks have too much money. But once again, their kidneys are sick.
Buy Now, Pay Later
There’s one small but interesting detail. The share of buy now, pay later (BNPL) products in the banking sector accounts for just 0.32 percent of total credit. The outstanding balance stands at Rp27.1 trillion across 31.23 million accounts. This figure has indeed grown by 20.15 percent. But let’s not overstate its significance. BNPL is like a drop of water in the desert—refreshing, but not enough to sustain a rice field.
In fact, it’s possible that Indonesians are becoming addicted to short-term debt for consumption. Meanwhile, productive debt for working capital is actually sluggish. This is an unhealthy pattern that could lead to civil bankruptcy in the future due to an inability to repay debts, resulting in inclusion in the OJK’s SLIK system.
On the other hand, the gross non-performing loan (NPL) ratio stands at 2.14 percent. The net NPL ratio is 0.82 percent. These figures remain within safe limits. However, the Loan at Risk (LaR) ratio has risen from 8.77 percent to 9.01 percent. This is a warning sign. Some borrowers are beginning to struggle with their installment payments.
Banks may feel secure because the CAR (capital adequacy ratio) remains at 25.87 percent—a sturdy fortress. But a fortress without soldiers to fight is merely a monument. In fact, the high CAR reinforces the label of “Lazy Bank.”
Indonesia’s economy is in an odd phase. There is plenty of money, but it’s reluctant to circulate. Banks are strong, yet they are hesitant to extend credit to the real sector. The public needs capital, but bureaucracy and risk are choking off the flow. Another issue that warrants attention is the rampant criminalization of loans. Non-performing loans are being treated as criminal offenses.
The psychology of state-owned banks and Regional Development Banks (BPDs) is being disrupted by the criminalization of non-performing loans. This applies not only to the PT Sritex non-performing loan case, but also to a number of Regional Development Banks (BPDs) and the Association of State-Owned Banks (Himbara). President Prabowo Subianto must put an end to this criminalization of non-performing loans so that banks are no longer suffering from “kidney stones” and can “urinate” in the form of smooth credit flows.
The government and the Financial Services Authority (OJK) must seriously treat this ailing kidney. Not just by injecting liquidity, but by clearing the channels, cutting interest rates, and encouraging banks to dare to take measured risks. Do not let the wet sheep continue to stand in the rain, while customers are parched for credit.
Everyone wants 2026 to be the year of recovery. But recovery won’t come if the heart is beating, the kidneys aren’t working, and the “sheep” are soaked in liquidity. Plus, a high CAR indicates “lazy banks” because credit demand is low due to an uncertain environment—full of anxiety and confusion.
The business world sees it as nothing but empty talk. It’s like management waking up and acting without a solid plan. Clearly, this is bad for the business world because it’s seen as unfriendly to the market. This “kidney stone” condition will persist for a long time, especially since rating agencies like Moody’s, S&P, and Fitch have downgraded Indonesia’s outlook. Plus, with global oil prices already above USD100 per barrel, this will certainly make things difficult for the business world and the economy. It’s a complete disaster.
The Sluggish Credit Thirst: Between a Painful “Kidney Stone” and a Wet “Sheep”
By Eko B Supriyanto, Editor-in-Chief of Infobank Media Group
TAKE A MOMENT TO REFLECT. This isn’t about politics or the volatility of chili prices in the market—that’s nothing new. But it’s about something deeper, something that drives the pulse of the economy: credit. Or more precisely, the reluctance of credit to flow. Just like in a healthy body, the kidneys must filter smoothly. But today, even though credit has grown by 9.96 percent over the past year, there are worrying signs. Like a sick kidney blocked by stones, it struggles to function.
Last year, according to Infobank Institute records, credit grew by 9.63 percent, with a significant influx of credit toward the end of the year directed to Agrinas for the Merah Putih Village Cooperative (KDMP) amounting to Rp150 trillion. Clearly, credit growth jumped immediately. It seemed as though credit was flowing freely. In reality, this was directed toward KDMP, whose impact remains a major question mark, as the credit was primarily allocated for office construction, infrastructure, and Indian-made vehicles for KDMP.
Data from the Financial Services Authority (OJK) as of January 2026 has just been released. It’s only been one month into 2026, but the reports are already telling the story. Credit grew by 9.96 percent year-over-year. This figure is indeed a slight increase from December 2025’s 9.63 percent. But don’t clap too soon. In simple terms, this is clearly like someone riding a bike up a hill—it looks like they’re moving, but they’re already gasping for breath.
Total credit reached Rp8.557 trillion. Is that a lot? Yes. But look deeper. Working Capital Loans (KMK)—the lifeblood of small and medium-sized enterprises, which start up production machinery every morning—grew by only 4.13 percent. Meanwhile, inflation in raw material costs never stops.
This is what we might call the “sick kidney syndrome.” Blood (money) is flowing, but not freely. The channels are clogged. The flow is weak. The pain isn’t just in the banking sector, but throughout the entire Indonesian economy.
Meanwhile, investment credit did jump by 22.38 percent. This is clearly good news. It means some are still daring to build factories and buy new machinery. But consumer credit grew by only 6.58 percent. People are holding back on spending. They prefer to hold onto cash.
This is where the irony lies. On one hand, there’s a term in monetary economics that might sound funny: “wet sheep’s wool.” This describes Third-Party Funds (TPF). It’s like a sheep’s fleece that’s just been caught in the rain—wet, heavy, but hard to process. TPF grew by 13.48 percent to Rp10.076 trillion. Money is piling up in banks. But who’s borrowing? The kidneys aren’t working. The “wet sheep” fleece remains unprocessed.
Take a look. According to the same data, liquidity is abundant. The ratio of liquid assets to DPK is 27.54 percent, far above the safe limit of 10 percent. In fact, the Liquidity Coverage Ratio (LCR) stands at 197.92 percent—nearly double the requirement. Clearly, banks have too much money. But once again, their kidneys are sick.
Buy Now, Pay Later
There’s one small but interesting detail. The share of buy now, pay later (BNPL) products in the banking sector accounts for just 0.32 percent of total credit. The outstanding balance stands at Rp27.1 trillion across 31.23 million accounts. This figure has indeed grown by 20.15 percent. But let’s not overstate its significance. BNPL is like a drop of water in the desert—refreshing, but not enough to sustain a rice field.
In fact, it’s possible that Indonesians are becoming addicted to short-term debt for consumption. Meanwhile, productive debt for working capital is actually sluggish. This is an unhealthy pattern that could lead to civil bankruptcy in the future due to an inability to repay debts, resulting in inclusion in the OJK’s SLIK system.
On the other hand, the gross non-performing loan (NPL) ratio stands at 2.14 percent. The net NPL ratio is 0.82 percent. These figures remain within safe limits. However, the Loan at Risk (LaR) ratio has risen from 8.77 percent to 9.01 percent. This is a warning sign. Some borrowers are beginning to struggle with their installment payments.
Banks may feel secure because the CAR (capital adequacy ratio) remains at 25.87 percent—a sturdy fortress. But a fortress without soldiers to fight is merely a monument. In fact, the high CAR reinforces the label of “Lazy Bank.”
Indonesia’s economy is in an odd phase. There is plenty of money, but it’s reluctant to circulate. Banks are strong, yet they are hesitant to extend credit to the real sector. The public needs capital, but bureaucracy and risk are choking off the flow. Another issue that warrants attention is the rampant criminalization of loans. Non-performing loans are being treated as criminal offenses.
The psychology of state-owned banks and Regional Development Banks (BPDs) is being disrupted by the criminalization of non-performing loans. This applies not only to the PT Sritex non-performing loan case, but also to a number of Regional Development Banks (BPDs) and the Association of State-Owned Banks (Himbara). President Prabowo Subianto must put an end to this criminalization of non-performing loans so that banks are no longer suffering from “kidney stones” and can “urinate” in the form of smooth credit flows.
The government and the Financial Services Authority (OJK) must seriously treat this ailing kidney. Not just by injecting liquidity, but by clearing the channels, cutting interest rates, and encouraging banks to dare to take measured risks. Do not let the wet sheep continue to stand in the rain, while customers are parched for credit.
Everyone wants 2026 to be the year of recovery. But recovery won’t come if the heart is beating, the kidneys aren’t working, and the “sheep” are soaked in liquidity. Plus, a high CAR indicates “lazy banks” because credit demand is low due to an uncertain environment—full of anxiety and confusion.
The business world sees it as nothing but empty talk. It’s like management waking up and acting without a solid plan. Clearly, this is bad for the business world because it’s seen as unfriendly to the market. This “kidney stone” condition will persist for a long time, especially since rating agencies like Moody’s, S&P, and Fitch have downgraded Indonesia’s outlook. Plus, with global oil prices already above USD100 per barrel, this will certainly make things difficult for the business world and the economy. It’s a complete disaster.
