Jakarta, 24 September 2025 — Prasasti Center for Policy Studies views Finance Minister Purbaya Yudhi Sadewa’s decision to place IDR200 trillion in state-owned banks (Himbara) as a major breakthrough to spur lending and investment growth. For this policy to be effective, however, it must be backed by strong credit demand.
“The purpose of placing IDR200 trillion in Himbara banks is to stimulate loan growth that can drive investment and, ultimately, accelerate economic growth. This effort deserves appreciation and support. To succeed, it must be accompanied by aligned policies from the monetary side as well as deregulation in the real sector,” said Piter Abdullah, Program and Policy Director at Prasasti.
The government’s fund placement, announced on September 12, 2025, is equivalent to 4.5% of national bank deposits. The allocation was distributed to BRI, Mandiri, and BNI at IDR55 trillion each, BTN at IDR25 trillion, and BRIS at IDR10 trillion. The placement fee was set at 4%, lower than the 5–7% special deposit rate previously applied, thereby reducing funding costs and strengthening banks’ intermediation capacity.
On the lending side, data as of August 2025 shows growth of only 7.56% year-on-year, with the Non-Performing Loan (NPL) ratio remaining below 3%. Liquidity is still ample, reflected in the AL/NCD ratio of 120.25% and the AL/DPK ratio of 27.25%, both well above the 10% threshold.
Other indicators, however, point to weak credit demand. Undisbursed loans reached IDR2,372 trillion, or 22.71% of total credit lines. “This large figure shows that banks have already allocated funds that businesses are not using. It reflects weak demand for credit, linked to economic activity that has yet to fully recover from the pandemic, compounded by global uncertainties arising from the war in Ukraine, the Israel–Palestine conflict, and trade frictions triggered by U.S. policies,” Piter explained. “Policy focus must therefore be directed toward restoring business confidence and strengthening household purchasing power,” he added.
Despite Bank Indonesia having cut rates five times this year—including a surprise 50 bps reduction in the Deposit Facility at its September meeting—businesses remain hesitant to expand and households reluctant to take on new debt. This shows that liquidity and lower interest rates alone cannot drive loan growth. Government fund placements in banks must be paired with fiscal measures that directly generate demand.
“Liquidity can be provided, but it cannot by itself revive business momentum. What is needed is stronger household purchasing power and greater business confidence. A more strategic approach is to pair liquidity relief with direct fiscal steps that raise incomes, create jobs, and stimulate investment appetite,” said Gundy Cahyadi, Research Director at Prasasti.
The government’s “8+4+5” economic package worth IDR16.2 trillion, announced on September 15, 2025, is positioned as such a tool. With a target of creating three million jobs by year-end, the package combines short-term stimulus—such as rice assistance, tax incentives, and cash-for-work programs—with longer-term initiatives in cooperatives, plantations, fisheries, and aquaculture. This supports household consumption while also reinforcing the foundations of productivity.
“The dual focus on consumption and productivity deserves recognition. Quick measures such as rice aid and tax incentives help lift purchasing power, while programs in the real sector support sustainable job creation. The challenge lies in execution. Without firm oversight and coordination, the impact risks being fragmented. But if carried out consistently, this package can become a real catalyst for growth,” Gundy added.
“We underline the importance of counter-cyclical fiscal policy. When private demand is weak, the government must step forward. Minister Purbaya’s commitment to set up a special task force to accelerate spending is the right move. Now, the priority is to ensure that delivery matches the promise,” he concluded.
Photo Source: BPMI Setpres/Rusman