Banking

Banking institutions currently account for around 77% of financial sector assets, while the sector’s overall penetration rate remains among the region’s lowest. The banking market remains highly fragmented, with 120 commercial lenders in 2012, alongside a much larger number of smaller institutions. Amidst rapid loan growth, average default rates for the country have dropped to historically low levels, though some suspect they will rise again in 2013. Relatively insulated from the volatility of international markets and supported by strong domestic consumption and rising incomes, Indonesian banks stand on healthy footing with high profitability and sufficient liquidity to expand their physical presence and lending. This chapter contains an interview with Darmin Nasution, Governor, Bank Indonesia.