Review on OJK`s Policies on Developing Priority Economic Sectors: Banking Potential and Risk Analysis

Jan 7 2016
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Financial Services Authority, Jakarta, January 7, 2016: In general, this research aimed to explore the impacts of credit in national priority sectors stipulated in Nawacita (nine priorities) program on banking risks (liquidity, asset, credit and insolvency ratio risks). The research also studied about influences based on categories of commercial banks (BUKU) and ownership.  In relation to the matter, a proxy research has been conducted on Nawacita program, that is in the fields of: (1) Agriculture; (2) Maritime; (3) Mining Exploration; (4) Construction (representing infrastructure sector); (5) Processing Industry (representing export-oriented products).

Research results showed that credit channeling to agriculture, maritime and processing industry sectors had low risk of potential bank failure (insolvency ratio). While credit channeling to mining exploration and construction sectors had high risk of bank failure, with the highest risk being in the credit channeling to construction sector.

Therefore, credit channeling to agriculture, maritime and processing industry sectors need to be enhanced considering the relatively low portion of credit channeling to agriculture and maritime sectors and the relatively low non performing loan (NPL) ratio in processing industry sector.  Meanwhile, credit channeling to mining exploration and construction has contributed to the high risk of bank failure. That is because, among others, the two sectors have a relatively long payback period, thus require government support to encourage credit channeling to the sectors. In the end, we hope that this research can give advantages to all parties. Should there be any input or suggestion that may support completion of our research, please submit it to:

Development, Supervision and Crisis Management Department (DPMK), Financial Services Authority.

Industry Profile Analysis Division - Menara Radius Prawiro Tower, 2nd Floor, Bank Indonesia Office Complex, Jalan M.H. Thamrin No. 2, Central Jakarta, Indonesia.

Phone (021) 29600000 ext. 8608 / 8790 / 8083

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