PT Bank Syariah Indonesia (BSI) Chief Economist Banjaran Surya revealed that the textile industry is a sector that has a high risk of financing in Islamic banking. The reason is, until now the textile sector is declining drastically and is still getting permission from the Financial Services Authority (OJK) for credit restructuring. "(High risk) because the output of textile exports to the US and Europe this year has dropped significantly," said Banjaran at the BSI Global Islamic Finance Summit 2023 (GIFS) held by BSI on Wednesday (15/2/2023).
The decline in global demand was the result of the world economic slowdown, one of the causes of which was the war between Russia and Ukraine. The effect is that the export-oriented textile industry languishes to the point where it has to lay off its employees. The government is also currently open to the possibility of imposing a limited ban (lartas) on several raw materials and textile products following the deteriorating industrial conditions after experiencing mass layoffs.
Therefore, continued Banjaran, banks must also understand the strengths and capacities of borrowers when they are going to provide financing. This is still a separate homework for the banking sector, including Islamic banking.
"I think it's back to mastery (every bank), so banks can provide financing, but banks must understand the strengths they have so they can prepare their capacities. That's the homework of each bank. Keep in mind, each bank also has a specialization in financing, for example, there is an excellent product bank in palm oil because it has palm oil experts," he said.
Currently, BSI's consumer financing ranks first above the average Islamic bank and syndicated financing is the fourth largest in Indonesia, which is dominated by the real wholesale, manufacturing, agriculture, forestry and property sectors. As of December 2022, BSI wholesale financing reached IDR 57.18 trillion, growing 15.80 percent year on year (yoy). BSI also continues to encourage syndicated financing, which reaches IDR 45 trillion or grows 13.44 percent year on year (yoy).a
