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YLKI urges revocation of zero-down-payment vehicle loan policy
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Vehicles stand in bumper-to-bumper congestion on a Jakarta toll road in this undated file photograph. (Antara/Yulius Satria Wijaya)
T
he Indonesian Consumers Foundation (YLKI) has called on the Financial Services Authority (OJK) to revoke a regulation on a 0 percent down payment loan for purchasing cars and motorcycles, as it could worsen poverty and air pollution.
YLKI chairman Tulus Abadi said on Monday in Jakarta that the regulation could lower the living standards of poor people because a major portion of their incomes would be used to pay installments on the loan.
“The policy is a kind of [...] trap for poor households,” Tulus said as quoted by kontan.co.id, and that debtors could potentially become trapped in bad debt.
He also believed OJK Regulation No. 35/2018 on car and motorcycle loans with 0 percent down payment would also increase the level of gas emissions, because vehicle owners tended to buy the subsidized Premium brand of gasoline with 88 RON rating, the lowest quality of fuel.
“The regulation will spread air pollution, not only in urban areas, but also in rural areas,” he said.
Tulus said the policy was also counterproductive to developing the MRT and light rail transit (LRT) public transportation systems as a means of reducing urban traffic congestion, because it would encourage consumers to buy private vehicles and discourage them from using public transportation.
“One of the duties of the OJK is to protect customers' finances, not to trap them in bad debt. If the OJK does not want to revoke the regulation, the YLKI and other consumer network groups will file a judicial review petition with the Supreme Court to challenge the policy,” Tulus said. (bbn)
