Indonesian Banks Diversify Products to Boost Credit Growth
Executive Summary
Key insights and market outlook
Indonesian banks are diversifying their product offerings to stimulate credit growth, which has been sluggish. PT Bank Woori Saudara Indonesia 1906 Tbk (BWS) has introduced innovative credit mechanisms such as back-to-back loan (BBL) schemes, allowing customers to use their deposits as collateral. This strategy aims to boost lending amid challenging economic conditions.
Deep Dive Analysis
Indonesian Banks Implement Product Diversification to Stimulate Credit Growth
Innovative Credit Mechanisms Introduced
In response to sluggish credit growth, Indonesian banks are diversifying their product offerings. PT Bank Woori Saudara Indonesia 1906 Tbk (BWS), a bank backed by South Korean investors, has been at the forefront of this strategy. As of September 2025, BWS reported total loans disbursed amounting to Rp 46.11 trillion, relatively flat compared to Rp 46.8 trillion in December 2024.
Back-to-Back Loan Scheme
BWS has introduced a back-to-back loan (BBL) scheme that allows customers to use their deposits as collateral for credit facilities. Under this mechanism, customers can secure loans up to 100% of their deposit value. This innovative product is designed to attract borrowers while managing credit risk effectively.
Strategic Response to Economic Conditions
The diversification strategy comes as Indonesian banks face challenges in achieving significant credit growth. By expanding their product portfolios, banks aim to stimulate lending and maintain their market position in a competitive environment.
Source References
Story Info
Topics Covered
Key Events
Introduction of Back-to-Back Loan Scheme
Credit Growth Strategies Implementation