Many foreign banks have not complied with SMEs credit policy

Bank Indonesia said many banks mainly branches of foreign banks have not complied with the call for setting aside at least 10 percent of their credits for micro, small and medium enterprises (SMEs) .

Head of Bank Indonesias division for development of SMEs Yunita Resmi Sari in Jakarta said despite facility such linkage branches of foreign banks are still in difficulty in extending credits for SMEs as asked by the central bank.

“We are aware that foreign banks have limited networks of branches and their capacity is not for SMEs,” Yunita said here on Thursday.

In 2015, the central bank asked banks to increase the portion of their credits for SMEs by 5 percentage points a year to 20 percent in 2018.

Yunita , the central bank is preparing a policy on SMEs credits from foreign bank branches.

Until August, this year, more than 100 of the 119 banks in the country already set aside 10 percent of their credits for SMEs.

Yunita said the SMEs credit market is still wide open , pointing out only 22 percent of 57.8 million units of SMEs have access to bank credits.

SMEs account only 19.7 percent or Rp827.3 trillion of the total outstanding credits of banks in the country by the end of the second quarter of 2016.

The SMEs credits grew 8.3 percent year-on-year in the second quarter of 2016.