Unused bank facilities reached Rp2.55 quadrillion as higher borrowing costs, softer demand and project delays kept companies from drawing approved loans.
Indonesian banks are sitting on a growing volume of approved but unused credit, pointing to corporate caution even as lenders retain ample capacity to finance economic activity.
Undisbursed loans reached Rp2.548 quadrillion ($143 billion) in July 2026, according to Indonesia’s Financial Services Authority, or OJK. That was 7.8% higher than the Rp2.364 quadrillion recorded a year earlier, an increase of Rp184 trillion. OJK regulates and supervises the country’s banks and other financial institutions.
These facilities are sometimes described locally as “idle credit.” They are loan commitments already approved by banks but not yet drawn by borrowers. Crucially, they are not overdue or non-performing loans.
Key figures:
- Undisbursed loans in July 2026: Rp2.548 quadrillion
- July 2025 level: Rp2.364 quadrillion
- Annual increase: 7.8%, or Rp184 trillion
- Largest concentrations: manufacturing and trade
- BI Rate in July and August 2026: 5.75%
OJK banking supervision chief Dian Ediana Rae attributed the increase to business cycles, project-completion schedules and borrowers’ cash-flow management. Slower demand has also reduced companies’ immediate financing needs, while higher interest rates have made executives more reluctant to add debt that could squeeze profit margins.
The rate backdrop matters. Bank Indonesia—the country’s central bank—raised its benchmark from 4.75% in April to 5.75% by June and held it there in July and August, official data show. The tightening was intended to protect the rupiah and contain inflation amid global uncertainty, but it also lifted financing costs for businesses.
Manufacturing and trade account for the largest amounts of unused credit partly because they are also the biggest recipients of productive lending. Companies in these sectors commonly arrange facilities in advance to fund inventory, machinery or expansion, then draw them only when orders, construction milestones or cash requirements justify the expense.
For banks, the rise presents a mixed picture. Undrawn facilities do not yet produce normal loan-interest income, potentially slowing asset and revenue growth. They also represent contingent liquidity demands because customers may draw the funds later. Yet the stockpile provides a ready-made pipeline for credit expansion if investment sentiment improves.
The figures also suggest that additional banking liquidity alone may not generate stronger lending. OJK said actual disbursement still depends on viable projects, borrower readiness and banks’ risk appetite.
For investors, approved credit therefore offers an incomplete measure of demand; utilisation and actual disbursement trends may be more revealing. Policymakers face a similar lesson: monetary or liquidity incentives must be accompanied by stronger final demand, predictable investment conditions and projects that companies are prepared to execute.