Indonesia’s loan growth expanded by 13.58% year-on-year in July 2026, up from 12.67% in June and reaching its fastest pace since August 2014. This acceleration was driven by accommodative macroprudential policies, particularly the continued optimization of the Macroprudential Liquidity Incentive (KLM) scheme to stimulate bank lending and financing in priority sectors. As of the first week of August 2026, banks had obtained KLM incentives totaling IDR 446.5 trillion.
Robust banking fundamentals also supported the expansion. The sector’s Capital Adequacy Ratio was high at 23.70% in June 2026, while asset quality remained sound, with the aggregate non-performing loan (NPL) ratio at 2.09% (gross) and 0.82% (net) in the same month. In addition, liquidity conditions were stable, as reflected in the liquid assets-to-third-party funds ratio, which stood at 23.10% in July 2026.
