BI: Downstream financing has the opportunity to accelerate credit growth

If we hear from the government that continues to push for downstream, the potential need for financing for downstream is very high

Jakarta (Armfalcon.com) – Head of the Macroprudential Policy Department of Bank Indonesia (BI) Yati Kurniati said downstream financing has the opportunity to further accelerate credit growth, in line with the demand for downstream financing which is still open.

“If we hear from the government that it continues to push for downstream, the potential need for financing for downstream is very high,” Yati said at the book launch event: Financial Stability Study No. 40 in Jakarta, Wednesday.

Also read: Downstreaming is constrained by developed countries’ opposition to financing

Data from the Investment Coordinating Board (BKPM) show that there is a need for downstream investment in the next five years of US$153 billion.

The need consists of US$108 billion in the energy sector, US$10 billion in the coal sector, US$19 billion in the oil and gas sector, US$13 billion in the agriculture and plantation sector, and US$3 billion US in the fisheries sector.

In addition, BKPM data also shows downstream financing (smelters) is still dominated by foreign debt (ULN), so that the portion of domestic financing is still minimal.

Yati said the various BKPM data were potential downstream financing to encourage bank intermediation, in addition to various methods currently being used to encourage credit.

On the other hand, he also hopes that downstreaming in the agriculture, plantation, food, fisheries and maritime sectors will be encouraged more vigorously. The reason is, these sectors can reduce the disparity in people’s income because they cover more small companies.

“So this step can be taken so that downstream is not only in the mining sector, where the scope of the company is more towards middle and upper corporations,” he said.

Also read: Bahlil asks banks to support downstream financing

source: www.antaranews.com

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