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Consumer Credit Dominant In Makassar

Amri Nur Rahmat, Hendri T. Aswor, Hadijah Alaydrus   -   Wednesday, March 5 2014, 5:48 am


MAKASSAR - Consumer credit dominates financing channel in South Sulawesi earlier this year, along with the strong demand for the upper middle class.

Therefore , there is a thought saying that consumer credit should be limited because it triggers the trade deficit in local areas.

Chief Representative of Bank Indonesia Regional Sulawesi, Maluku, and Papua Suhaedi delivered credit in South Sulawesi (Sulawesi) in January 2014 grew 14.07% to IDR79.17 trillion compared to IDR69.02 trillion a year earlier.

According to him,  judging from the largest growth was recorded by 43.3% investment credit on an annual basis year on year (yoy) . This was followed by consumer loans 14.36 % (yoy) and working capital loans of 2.45 % (yoy).

"However, the composition of the largest credit based consumption usage is 43.47%, followed by working capital loans of 35.01%, and investment of 21.62%," he said in the Regional Economic Studies Seminar 2014 in Makassar in South Sulawesi, on Tuesday (3/4).

More about consumer credit, the biggest growth in this segment occurred on mortgage products and motor vehicles financing. The two segments grew 28.31 % (yoy) and 7.01% (yoy) respectively.

Other credit disbursement recorded the highest, i.e. 35.2 % (yoy). However, this credit is a combination of several business segments.

Meanwhile, for equipment loans and credit multipurpose negative growth respectively 26.3% (yoy) and 6.18 % (yoy).

"When viewed from the structural contribution of household credit mortgages contributed by 32.48% , multi-purpose loans with 30.6%, and others with 26.13 %, motor vehicle loans with 10.54 % and equipment loans of 0.25%," said Suhaedi.

Hasanuddin University’s Economist Hamid Paddu expressed demand for consumer credit is still high due to the increase in the middle class consumers in the province. According to him, the people of South Sulawesi tend to spend money on less productive goods .

"For example, people used to buy a motorcycle for a household, but in the province, they buy one motorcycle for all the family members. It triggers demand for consumer credit is rising," he said.

According to him, there should be a moratorium on consumer credit and it should be transferred to productive segments, such as investment and small businesses.

Moreover, he added, the increase in consumer credit also fueled the local trade deficit because the demand for goods from outside the island increased. "However, it is likely to be difficult as well," he explained.

In the same occasion, Regional Manager of PT Bank Rakyat Indonesia Tbk. for Makassar Region Achmad Chumaidi pointed out that the company is still focusing on small business loan. Because the small business loan portfolio is still above 80 % in the South Sulawesi.

"Our credit consumption is only 5%. It is our small business loan demand is great," he said.

 Meanwhile, PT Bank Mandiri (Persero) Tbk. Region X Makassar estimates loan disbursement this year grew at 17.9% rate with a value of IDR18 .7 trillion.

Head of Region X Makassar Pramono C. Akoso said the estimation on loan distribution was almost the same as the credit growth during 2013, which stood at 18% compared with the previous year.

According to him, this year a number of sectors will be targeted primarily lending sector that drives the economy in the working area of Bank Mandiri X Makassar such as mining and agriculture and trade.

"We expect credit for all segments in the region include Makassar X region, Maluku and North Maluku can grow up to 17.9%. Entire sector we will push to reach the target," he said, Tuesday (3/4).


Editor : Taufik Wisastra

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