ABSTRACT
The current major housing problems in Indonesia are a trend that continues significantly with a 11,8 million home backlog; 5.9 million existing houses which are uninhabitable; 4,8 million families who share roofs with other families; and 50.8% of Indonesian citizens being informal workers who have no access to loans from banks. Although Malaysia’s GDP per Capita is quite similar to Indonesia, its mortgage rate is far higher (near 40%). This indicates that mortgage financing in Malaysia and Singapore is a good banking business. To reduce the backlog comprehensively, the government provides financial assistance through a mortgage subsidy scheme of Housing Financing Liquidity Facility (FLPP). Provision of subsidies on the housing sector is one of the government policies on the provision of housing, especially for low-income people. In 2015, the government allocated IDR 8.1 trillion to build 98,300 housing units and IDR 5.1 trillion in FLPP to provide MBR financing assistance and financing, which means financing with 5% mortgage rate, tenor up to 20 years, 1% down-payment and VAT exemption. OJK survey in 2016 revealed that the factors hindering the growth of housing business were mortgage interest (20.36%), down-payment needs (16.57%), taxes (16.13%), permits (14.45%), and the price of building materials (11.68%). More than 76% of the consumers still rely on bank credit (KPR/KPA) to buy a house. According to data analysis, from about 30 banks as FLPP mortgage providers, there are only 8 banks listed in IDX, and from those banks only BTN dominated the credit disbursement significantly (FLPP, SSB, and subsidized construction). Therefore, the evaluation of subsidized credit performance should focus on BTN. Compared to total mortgage amount, the subsidized scheme only takes 10%. Therefore, even if the Non-Performing Loan (NPL) from that 10% subsidized scheme is high, it will not significantly affect the total mortgage performance.
