Motorcycle loan bubble imminent: Bapepam
Rendi A. Witular, The Jakarta Post, Jakarta | Thu, 01/12/2012 4:56 PM
The massive and relatively loose loan channeling for motorcycles is estimated to pose a systemic risk to the country's economy, according to the Capital Market and Financial Institution Supervisory Agency (Bapepam).
"Because it's so easy to get loans, many people default on their payments," said Bapepam chairwoman Nurhaida on Thursday.
"This situation is becoming a worry for us amid the looming impact of the global economic crisis," she said.
Bapepam is currently drafting a new regulation that will raise the minimum down payment when buying a motorcycle to around 30 percent from the current figure of less than 10 percent.
Around 80 percent of the more than 8 million motorcycles sold last year were financed by financing companies, according to Nurhaida.
"Around 65 percent of consumers who obtained loans last year paid less than 10 percent of the total price in a down payment. They are prone to default on their loans," she said.
She did not disclose figures of defaulted loans.
Outstanding loans for motorcycles and cars last year soared by more than 10 percent to around Rp 120 trillion (US$13 billion), according to Finance Minister Agus Martowardojo. (dmr)
