InfoSAWIT, SAMARINDA — Credit distribution in East Kalimantan (Kaltim) recorded a positive trend in the fourth quarter of 2024, with the agricultural sector emerging as the main driver of growth. Amid a slowdown in the mining and industrial sectors, agricultural credit surged sharply due to the peak palm oil harvest.
Bank Indonesia's Kaltim Representative in its latest report stated that agricultural sector credit grew by 2.81 percent year-on-year, reversing a contraction of 3.08 percent in the previous quarter.
“The agricultural sector, particularly palm oil, has become the mainstay of credit growth in Kaltim,” said Budi Widihartanto, Head of the Kaltim BI Representative Office, as quoted by InfoSAWIT from Kaltim Pos on Monday (April 7, 2025). He noted that this surge was driven by high palm oil production reaching its peak during this period.
Conversely, two other major sectors, mining and industry, experienced contractions of 9.36 percent and 3.50 percent year-on-year, respectively. This aligns with the weakening of the Gross Regional Domestic Product (GRDP) in those sectors.
Despite the contraction, the mining sector still contributed a significant portion to total credit in Kaltim, reaching 21.53 percent. “The mining and industrial sectors remain major contributors to credit, but their growth is slowing,” Budi explained.
From a risk perspective, the overall credit quality in Kaltim remains well-maintained. The non-performing loan (NPL) rate in the agricultural sector is very low, at only 0.10 percent. The mining and processing industry sectors recorded NPLs of 0.42 percent and 0.14 percent, respectively.
“The construction sector also shows healthy credit quality, with an NPL of 2.89 percent, still well below the 5 percent threshold,” he added.
With the improving global and national economic climate, BI Kaltim expects the positive credit trend to continue in the following quarters. However, the slowdown in the mining and industrial sectors needs serious attention given their significant contributions to Kaltim's economic structure.
This development also marks the potential of the agricultural sector as an increasingly relevant economic pillar, especially amid fluctuations in extractive sectors like mining. (T2)
