Construction Sector’s NPL Increases: What Happens?

By Editorial Team 03/06/2020
Summary

The quality of construction loans in the micro, small, and medium enterprise (MSME) segment has deteriorated. Financial Services Authority’s (OJK) data showed that the total disbursed credit for the sector, as of February this year, was Rp 58.49 trillion with the non-performing loans (NPL) ratio of 9.40 percent. It was higher compared to last year’s rate at 7.93 percent.

As a result, the NPL rate in the construction sector exceeded the banking industry’s NPL. As of February 2020, the banking sector’s gross NPL suffered from a year-on-year increase from 2.59 percent to 2.79 percent.

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