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SMF boosts collaboration with regional development banks
State-owned secondary mortgage firm PT Sarana Multigriya Finansial (SMF) has reiterated its commitment to increasing loan disbursement for home mortgages through regional development banks (BPDs), especially in the central and eastern parts of Indonesia
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tate-owned secondary mortgage firm PT Sarana Multigriya Finansial (SMF) has reiterated its commitment to increasing loan disbursement for home mortgages through regional development banks (BPDs), especially in the central and eastern parts of Indonesia.
BPDs play an important role in boosting this type of credit as they have a vast network at the regional level to funnel housing finance liquidity facilities (FLPP) for residents, according to Sarana Multigriya.
“BPDs know the [local] people’s characteristics well,” president director Ananta Wiyogo said recently, explaining that such an advantage could help BPDs significantly increase loan disbursement in the regions.
Collaboration with 24 BPDs across the archipelago is part of the company’s strategy this year to strengthen loan channeling. It currently partners with 11 BPDs, aside from state-owned lender Bank Tabungan Negara (BTN) and Bank Mandiri, six sharia banks and a number of multi-finance firms.
Most of the home mortgages, or around 56 percent, are still disbursed through government banks; followed by private banks, making up 37 percent of loan disbursements; BPDs, comprising 6 percent; and foreign banks, at 1 percent of loan disbursements.
Despite the small contribution, BPDs have a large potential to channel loans, mainly for specific target markets, such as civil servants and city-owned enterprises (BUMD).
From January to June 2017, SMF disbursed Rp 250 billion (US$18.79 million) in home financing through BPDs, SMF director Heliantopo said on Friday.
It has disbursed Rp 4.25 trillion in total loans in the first half of 2017, or 74.56 percent of its full year’s target of Rp 5.7 trillion. SMF’s loan disbursement, meanwhile, grew by only 3.5 percent year-on-year (yoy) compared to Rp 4.19 trillion in 2016.
Its total accumulative loans from 2006 to June this year amounted to Rp 32.64 trillion. Of the figure, Rp 24.49 trillion was channeled as loans to mortgage lenders, and Rp 8.15 trillion was disbursed through securitization transactions.
SMF’s net profit rose to Rp 213.78 billion as of June this year, or a 29 percent yoy increase, with a 23 percent rise in revenue to Rp 575.22 billion.
“The increase in our revenue was triggered by the growth in loan disbursements, which reached Rp 4.25 trillion. Our target for the first half was [only] Rp 2.3 trillion,” said SMF director Trisnadi Yulrisman.
Apart from channeling housing loans through BPDs, SMF is also looking to enhance its collaboration with multi-finance companies to help provide housing for low-income Indonesians. However, the challenge is that many multi-finance firms are not used to channeling loans for home mortgages, as they usually disburse loans for cars or motorcycles.
The government established Sarana Multigriya in 2005 to help realize its target of building 1 million homes for low-income residents every year. Housing backlog remains an unresolved problem in Indonesia, with the figure currently at 11.6 million homes and expected to rise in the future.
