The Effect of Macroeconomic Uncertainty on Bank Credit Allocation in Indonesia

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Macroeconomic uncertainty significantly reduces credit allocation by banks in Indonesia.
The study utilized GARCH and ARDL methodologies for analyzing credit data from 105 banks.
Monthly data from January 2012 to September 2024 was examined for trends in credit decisions.
Findings indicate that banks act cautiously under macroeconomic uncertainty, highlighting policy implications.

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Analysis reveals macroeconomic uncertainty negatively affects credit allocation in Indonesian banks, suggesting caution in policy design.

Azzahra et al. (2025) studied this question.

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