Govt urged to increase loan disbursement to support businesses

Jakarta (ANTARA) - Chair of Commission XI of the House of Representatives (DPR), Mukhamad Misbakhun, has called on the government to increase the disbursement of loans to support business growth in Indonesia.

In a statement released here on Sunday, Misbakhun underlined that the step is necessary as banking credit growth remained at a single-digit level during the first quarter of 2025.

Based on the latest data, banking credit in May 2025 continued its slowing trend, with growth recorded at 8.43 percent year-on-year (YoY), down from 8.8 percent in April and 9.16 percent in March—the lowest growth since mid-2023.

"The decline was mainly caused by the weakening of the community's purchasing power and the shrinking middle class in Indonesia," he said.

He also pointed out several sectors facing difficulties in accessing credit, including the textile, mining, and downstream industries.

This issue, he continued, has led to limited capital and operational expenditure for businesses in those sectors, hindering expansion and productivity improvements.

According to Misbakhun, optimizing the disbursement of investment and working capital loans is crucial to support economic recovery and real-sector growth.

Data from the Financial Services Authority (OJK) showed that investment loans grew 13.74 percent, while working capital loans grew 4.94 percent in May 2025. However, he deemed it necessary to further increase growth to meet business needs.

"Banks are expected not only to focus on capital management but also to be more active in disbursing loans to productive sectors that make a significant contribution to the national economy," he remarked.

More optimal loan disbursement, he added, would strengthen the capacity of businesses to expand, boost competitiveness, and create new jobs.

"This step also supports the economic programs under President Prabowo's policies," he said.

Furthermore, he emphasized the importance of synergy between regulators, banks, and business players to address obstacles in loan disbursement, especially in sectors that have not received sufficient attention.