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Indonesia’s outstanding bank loans could exceed Malaysia’s in five years and Singapore’s in six because of the rise in Indonesia’s population and household income, Bank Mandiri says.

“Indonesia has a young working population, and this will drive the retail segment,” said Pahala Mansyuri, chief financial officer at Bank Mandiri.

Malaysia has a population of 28.5 million and Singapore 5.2 million, but there are 139 million in Indonesia’s workforce alone. Indonesia’s average per capita income, however, was only $3,000, compared to $8,373 in Malaysia and $43,867 in Singapore.

Indonesia’s loans could be higher than its neighbors’ if it can maintain a yearly loan growth of 22 percent, compared to Malaysia’s 10.5 percent and Singapore’s 14.4 percent, Pahala said.

According to Bank Mandiri’s research, Indonesia’s lending by value in 2016 would be $653 billion versus Malaysia’s $648 billion and Singapore’s $657 billion. In 2017, it is estimated to have increased to $798 billion for Indonesia, $741 billion for Malaysia and $786 billion for Singapore.

Banks are targeting retail personal loans, the sale of insurance linked to investments, equities and shariah products such as mutual funds that comply with Islamic law to attract young workers, Pahala said.

He forecast Indonesia’s loan-to-deposit ratio, currently at 77 percent, to increase to 91 percent by 2014.

“Deposits need to grow in line with lending growth,” Pahala said. “Retail deposits could be key in winning the competition with other domestic banks.”

As credit expands, there would be a greater need to have stronger capital for domestic banks to keep up, Pahala said.

New data from Bank Indonesia showed that loans at the nation’s 120 commercial banks in January to August rose 23 percent to Rp 2,032 trillion ($230 billion) from a year earlier.

In addition to boosting banks’ income from credit, lenders are focusing on other means to make money, including marketing the use of third-party funds such as deposits and travelers’ checks.

“Competition to grab more third-party funds could change the face of the game,” he said.

Pahala said credit and third-party growth would be followed by an leap in fee-based income.

“The banking sector saw a 15 percent average growth in income from the sale of shares and bonds from 2007 to 2011,” he said.

According to the Deposit Insurance Corporation (LPS), the number of accounts at the nation’s 120 commercial banks stood at nearly 100 million as of September, almost unchanged from the same period last year. These accounts represent Rp 2.59 trillion in savings, compared to last year’s Rp 2.49 trillion.

Darmadi Sutanto, a director at Bank Negara Indonesia, said global uncertainty had a limited impact on Indonesia’s banking sector. Strong car and motorcycle sales have driven consumer loans, he said.