Executive Summary

Key insights and market outlook

Indonesian banks are implementing strategies to maintain paylater growth amid slowing consumer spending, as outstanding BNPL credit reached Rp 24.86 trillion with 25.9% YoY growth ¹

. Meanwhile, banks are also seeking foreign currency liquidity despite weak credit demand, with foreign currency lending standing at Rp 1,222 trillion as of July 2025 ².

Full Analysis

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Deep Dive Analysis

Indonesian Banking Sector Navigates Complex Growth Challenges

Paylater Growth Faces Headwinds

The Indonesian banking sector is experiencing a slowdown in consumer spending that is affecting the growth of buy now, pay later (BNPL) or paylater services. Despite this, outstanding BNPL credit managed by banks still reached Rp 24.86 trillion by November 2025, growing at 25.9% year-on-year (YoY) ¹

. While this represents a robust growth rate, it marks a deceleration from the 32.35% YoY growth recorded in August 2025 ¹.

According to Trioksa Siahaan, Vice President of the Indonesian Banking Development Institute (LPPI), the slowdown in BNPL growth is closely tied to household consumption trends. "The level of purchasing power, which is currently making people more cautious about spending, has an impact. If it improves, BNPL will also improve," Trioksa explained ¹

. This observation is supported by data from the Central Statistics Agency (BPS) showing that household consumption growth slowed to 4.89% YoY in Q3 2025, down from 4.97% YoY in the previous quarter ¹.

Banks Seek Foreign Currency Liquidity Amid Weak Credit Demand

In a separate development, Indonesian banks are actively seeking foreign currency liquidity despite weak demand for foreign currency-denominated credit. As of July 2025, foreign currency lending stood at Rp 1,222 trillion, showing a modest 4.35% YoY growth ²

. This behavior of banks 'hunting' for liquidity while credit demand remains subdued presents a potential challenge as it involves maintaining expensive funds that may not be immediately deployed into profitable lending activities ².

Strategic Implications for Indonesian Banks

The dual challenges of slowing paylater growth and weak foreign currency credit demand require banks to adopt nuanced strategies. For BNPL products, banks may need to focus on risk management and customer retention as growth slows. For foreign currency operations, banks must balance liquidity management with the potential risks of maintaining high-cost funds in a low-demand environment.

References