Per The Jakarta Post, bank lending in Indonesia grew by just 2.09% from December last year to June compared with 16.26% a year earlier. Working capital loans slid the most, a sign of firms’ reluctance to expand, and banks also cutback loans out of fear that non-performing loans (NPL)–currently at 3.94%– would increase beyond the central bank’s accepted 5% threshold. Yet central to the reasons why businesses are reluctant to borrow, argues Erwin Aksa, chairman of the Indonesian Young Entrepreneurs Association, are their lenders’ self-imposed, high deposit rates. Large sovereign bond issuances have driven up the cost of money, as do the demands of large depositors–most of whom are state-owned companies, and which currently account for roughly one-half of banks’ third-party funds. The vicious cycle impairs liquidity, however, as banks fear above anything else a loss of depositors and a sudden run