Loans pop as Indonesia rates drop

IN FOCUS

In today’s newsletter, we look at:

• Indonesia’s central bank cutting rates to grow loans
• Carsome Capital getting into a deal with MUFG

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Hello,

Last week, India’s central bank cut interest rates by 25 basis points – the first such move in nearly five years.

Personally, this won’t affect my finances since my family is on a fixed home loan rate. But for those with floating rates, it should make home, car, and business loans more affordable – though probably not enough to boost lending.

At US$34 billion, liquidity deficit in India’s banking system has hit a one-year high in January. This indicates that more action may be needed to truly stimulate the economy.

Meanwhile, banks in Indonesia are gearing up for stronger lending growth this year, fueled by fresh incentives from financial regulators.

Bank Indonesia aims to drive lending growth to 11% to 13%. Will these incentives be enough, or will the country also need a stronger push like India? My colleague Glenn explores this in this week’s The Big Story.

In the Hot Take, I break down Mitsubishi UFJ Financial Group’s (MUFG) acquisition of a 49% stake in Carsome Capital and what this means for Carsome Group’s long-term strategy.

— Samreen

THE BIG STORY

More loans, more growth? Indonesian banks think so

Image credit: Timmy Loen

Indonesian banks anticipate a boost in lending performance this year amid fresh incentives from financial regulators.

THE HOT TAKE

Turn every connection into a positive ROI