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BTN to tap informal workers with micro mortgages
State-owned lender Bank Tabungan Negara (BTN) will expand its business by eyeing more collaborations with regional governments and corporations to expand micro mortgages for informal workers
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tate-owned lender Bank Tabungan Negara (BTN) will expand its business by eyeing more collaborations with regional governments and corporations to expand micro mortgages for informal workers.
More than 6 million informal workers are potentially eligible for the loans, and the publicly listed lender believes that it can attract at least 10,000 people to apply for the loans in the next few years, either through
subsidized or nonsubsidized schemes.
There are at least 60 million informal workers nationwide, according to the Central Statistics Agency (BPS).
To reach its target, BTN has been collaborating with government officials in Kendal in Central Java, to provide mortgage loans for fishermen, meatball sellers and temporary teachers, among others, as a first step in expanding into the informal sector, BTN director for strategy, compliance and risk
Mahelan Prabantarikso said on Tuesday.
Some 40,000 temporary teachers could be eligible for mortgage loans in Kendal. BTN is interested in providing housing loans there for at least 4,000 people next year.
Apart from the bank’s efforts to collaborate with regional governments, BTN has also partnered with homegrown ride-hailing app Go-Jek to facilitate their drivers to obtain subsidized housing loans with a total value of Rp 51.6 billion (US$3.6 million).
Reaching out to informal workers by forging relationships with communities is BTN’s main strategy to accelerate loan disbursement to the informal sector, Mahelan said.
BTN divided informal workers into two criteria: people who are bankable and have the ability to pay out the loan, and those who are non-bankable but have the ability to pay.
For the non-bankable group, BTN plans to disburse micro-mortgage loans through its multifinance subsidiary that it plans to acquire in the first half of 2018, called Danareksa Finance.
BTN finance and treasury director Iman Nugroho Soeko said the acquisition was important to boost credit growth because through the multifinance company, the bank could use the “renting and selling” program.
This means that when debtors cannot pay back loans, the multifinance company could
easily ask them to leave the house. “So from our side, financial management would be easier,” he said.
Aside from informal workers, BTN believes that the demand for housing will still be large next year, as Indonesia still has a housing backlog of at least 11.38 million units.
The government has committed, with its flagship One Million Houses program, to improve access of low income groups to mortgages, despite the fact that it has continuously failed to meet the target.
Two subsidized programs will be applied by the government next year, namely interest gap subsidy (SSB) and housing loan liquidity facility (FLPP).
The Public Works and Public Housing Ministry’s director general for housing finance, Lana Winayanti, said the government aims to build 42,000 houses through the FLPP program and 225,000 houses through the SSB program in 2018.
