How Healthy the Indonesian Banking Industry is?

In the beginning case of COVID-19 in Indonesia, it did not affect the banking industry since it is merely about humanity and healthiness issues. Bank performance was good that proved by several ratios. Non-Performing Loan (NPL) was still at a low level with 2.5% gross and 1.3% net. Capital Adequacy Ratio (CAR) also indicates good performance since it is higher than the standard, which is 23%.

However, there will be some issues raised that should be considered. Due to the deceleration of economic, it might affect NPL sooner or later because corporate performance and Micro, Small, and Medium Enterprises (UMKM) will decline as well. The small debtor of MSMEs (UMKMs) faces difficulties because their enterprises could not run well and hence their income decline. Therefore, the government has provided fiscal stimulus by providing social support (bansos) to those who need.

SAHH

Source:

CNBC Indonesia