The Dilemma of Interest Rates

Indonesian banks are reluctant to lower interest rates on credits as economic slowdown continues.

March 24, 2009

MANY businesses complain of the difficulty of getting working capital. “Even to get Rp3 billion in loans, we have to back the request with a personal guarantee,” says one executive. Eight months ago the same bank he went to offered him up to Rp50 billion in credits.

It’s not a matter of liquidity. Banking indicators published on Bank Indonesia’s website show that third party funds still accounts for much of the deposits with banks, amoun

...

More Articles