BTN signed a memorandum of understanding (MoU) with KoinWorks on Thursday, under which the bank has agreed to channel the funds through a supply chain financing mechanism to borrowers in the property sector, including but not limited to property suppliers and contractors. 

Borrowers will be able to access loans of up to Rp 1 billion. Those who have complete documentation can receive the loan within five days. 

“To date, we have given direct financing to developers. These developers need the rest of the value chain, for example, material supplies and contractors. KoinWorks will work on the latter,” BTN president director Pahala Nugraha Mansury said during a media briefing on Thursday. 

“Our strategy going forward is to capture the entirety of businesses within the housing value chain,” he added, noting that the bank would engage in future partnerships with fintech platforms if the current partnership was successful. 

During the pandemic, loan disbursement has slowed as lenders have become wary of rising bad loans during the pandemic-induced contraction. 

Among fintech platforms, loan disbursement grew by only 3.12 percent year-on-year (yoy) in May this year. During the same period last year, it increased 10.87 percent, according to data from the Financial Services Authority (OJK). 

BTN’s loan disbursement has also slowed this year. In the first six months of the year, the bank’s total lending and financing grew by only 0.32 percent yoy, to Rp 251.84 trillion as of June. During the same period last year, lending grew by 18.78 percent yoy to Rp 251.04 trillion.

Read also: BTN to improve asset quality, boost low-cost funds

“For SMEs, there are a lot of job opportunities available, but they are constrained by capital and cash flow,” KoinWorks chief executive officer and cofounder Benedicto Haryono said during the media briefing. He noted that loans related to construction made up about 20 percent of the company’s total portfolio. 

Through the partnership with BTN, KoinWorks will be able to offer a lower interest rates to borrowers. Normally, interest rates on the online lending platform are between 16 and 22 percent. Under the partnership, the platform will offer rates in accordance with BTN's standards, Benedicto said. 

“This is a blessing for us as well. We can add value for our customers that we couldn’t give previously,” Benedicto said. 

In a press release published after the event, the CEO noted that the partnership would add to the list of strategic partnerships that the platform’s business lending arm, KoinBisnis, had formed to disburse financing to SMEs in Indonesia. 

KoinWorks’ credit scoring system would assist in distributing the funds to more borrowers, Benedicto said. Through the platform, borrowers could access loans with no collateral required. 

Despite consumers holding off on many purchases for the time being because of the pandemic, demand for housing remains. 

A 2020 survey by marketing consulting firm MarkPlus has found that although house sales are expected to decline this year, many consumers are planning to buy houses next year. 

Half of the survey’s 100 respondents, residing mostly in Greater Jakarta, said they still expected to buy a house next year. 

“The future demand may not be as strong, but we expect demand to bounce back next year as customers already have plans to buy [a house],” MarkPlus senior associate Irfan Setiawan said in a virtual discussion on May 29. 

Opportunities in the property and construction sector remain as the government seeks to tackle the housing backlog in the country. President Joko “Jokowi” Widodo hopes to build 1.25 million houses this year to address a housing backlog that stood at 7.6 million as of 2015. 

Since 2015, around 4.8 million houses have been constructed. The Jokowi administration hopes to build an additional 3.9 million houses by 2024.

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