Since the beginning of this year, Bank Indonesia has lowered the BI-Rate benchmark interest rate three times. This policy is expected to boost the economy, especially the business world.
On January 15, 2025, BI lowered the benchmark interest rate by 25 basis points (bps); from 6.00% at the end of 2024 to 5.75%. Another reduction was made on May 21, 2025 to 5.50%. Finally, on July 16, the interest rate was also lowered to 5.25%.
Along with the BI-Rate reduction, the Deposit Facility rate also fell by 25 bps to 4.50%. The Lending Facility rate also fell by 25 bps to 6.00%.
BI continues to encourage bank lending to support the financing of economic activities. Bank credit in June 2025 grew 7.77% on an annual basis. This figure decreased compared to the growth in May 2025 which amounted to 8.43%.
Based on usage, investment loans grew at a higher rate of 12.53% compared to consumer loans and working capital loans which amounted to 8.49% and 4.45% respectively.
Based on data from the last few years, the largest distribution of credit is for working capital loans of around 44%-45%. Followed by distribution for consumption loans 28%-29%. The remaining 25%-27% is for investment loans.
The portion of investment and consumption loans tends to increase from year to year. Meanwhile, the portion of working capital loans in 2024 decreased slightly compared to 2023, from 45.4% to 44.5%.
The policy of lowering the BI-Rate followed by a reduction in interest rates on loan facilities is expected to leverage the distribution of business capital loans whose contribution to the development of the business world will be very meaningful.
