Danamon Financial Friday Episode 7: Supports Ownership Of Houses And Vehicles Amid New Economic Optimism

JAKARTA - PT Bank Danamon Indonesia Tbk (Danamon) launched the latest episode of Danamon Financial Friday (DFF) which aims to help the Indonesian people, especially the younger generation, in achieving the dream of owning a home and vehicle in the midst of dynamic economic dynamics. In this seventh episode, Danamon offers practical guidance and financial solutions for the community, responds to current economic challenges and takes advantage of various opportunities under the new government's economic policies.

Today, people's purchasing power is facing various challenges, with a significant decline experienced mainly among the middle class. Data from the Central Statistics Agency (BPS) shows that the middle class is financially vulnerable, with a decrease in percentage from 21.45 percent in 2019 to only 17.13 percent in 2024.

In line with these developments, there has been a downward trend in the average savings balance in recent years, from an average savings of IDR 3 million before the pandemic in 2019 to only IDR 1.8 million as of April 2024. Furthermore, the 2019 and 2024 BI surveys showed that the proportion of expenditure to income increased from 68 percent to 74 percent, the proportion of deposits to revenue decreased from 20 percent to 17 percent, and the proportion of installment payments to income decreased from 12 percent to 9 percent.

This phenomenon is now known as Eating Savings (Mantab), which is a condition where people rely more and more on savings to cover their daily needs. The phenomenon, which has been triggered by deflation, has recently become clear evidence of the economic pressures felt by various levels of society, and can have implications for reducing public interest in large purchases such as houses and vehicles.

To overcome this situation, the government has launched various steps that are expected to encourage credit growth and make it easier for the public to access financing, especially in the property and automotive sectors that are urgently needed to encourage economic recovery.

Bank Indonesia (BI) also plays an active role in maintaining economic stability through a policy of lowering interest rates by 25 basis points in September 2024, as well as extending the policy of easing Loan-to-Value (LTV) and Financing-to-Value (FTV) until the end of 2025.

Hosienna Evalita Situmorang, Economist of PT Bank Danamon Indonesia Tbk, assessed Bank Indonesia's policy of lowering interest rates as a positive step to increase people's purchasing power.

"The decline in interest rates is expected to boost credit growth, which in turn will support consumption and investment," said Hosianna, Wednesday, November 20.

These policies are in line with optimistic economic growth targets, namely up to 8 percent in 2029, with a focus on policies that support investment, job creation, and various policies to make it easier for people to own homes and vehicles.

The moment of lowering interest rates by Bank Indonesia is very appropriate to be utilized, especially for productive consumption, such as purchasing vehicles or taking home installments. The incentives offered by the government are also very relevant, not only to support people's purchasing power, but also to encourage labor-intensive sectors, which are expected to absorb more labor and, in turn, increase people's purchasing power widely.

These developments have succeeded in fostering new hope in the community, so that overall market sentiment becomes quite positive.

"Danamon welcomes and fully supports the government's initiative so that more and more Indonesians can have decent housing at affordable prices. We are optimistic that it can help the community maximize the opportunity to have a dream home with a holistic financial solution from Danamon that can be adjusted to every customer," said Enriko Sutarto, Consumer Lending Business Head, PT Bank Danamon Indonesia Tbk.

Therefore, his party again offers various financial programs. For example, the KPR Take Over program that allows customers to move mortgages from other banks to Danamon with competitive interest, fixed for up to five years. Enriko emphasized that this flexibility is very important for customers.

"With KPR Take Over, customers get convenience in managing their cash flow with a longer tenor, lighter installments, or top up options for additional needs," he explained.

In addition, Danamon also presents KPM Prima which is supported by Adira Finance for vehicle financing. This product allows customers to own new and used vehicles with flat interest and insurance protection from Zurich Asuransi Indonesia. With KPM Prima, passenger car financing products, both new and used, commercial cars, premium motorbikes (motors with OTR criteria > 100 million or CC > 500), non-premium motors (motors outside the premium motorcycle criteria) and Vespa offered to Danamon customers managed by Adira Finance (Daemon's subsidiary), customers can also realize their dream of owning new vehicles, even when house installments are still running.

In addition to applying for vehicle credit, customers can also apply for Multi-Purpose Loan in the D-Bank PRO, if they need additional funds for personal needs such as developing businesses, children's schools, house renovations, or other sudden needs.

Ivan Jaya, Consumer Funding and Wealth Business Head of PT Bank Danamon Indonesia Tbk, stated that KPM Prima helps people own vehicles with affordable installments, so that they can realize transportation needs with more structured costs.

"With this collaboration, Danamon ensures that people can get financial support as needed. Danamon utilizes digital technology through the D-Bank PRO application to make it easier for customers to access banking services. With this application, customers can conduct installment simulations, fill in data automatically, and apply for financing quickly. This makes Danamon more relevant to people who prioritize practicality and speed in accessing banking services in today's digital era," he explained.

Danamon also supports the government's efforts to build three million houses in one year to overcome the housing backlog which now reaches 12.7 million units. This initiative aims to create more affordable housing access for the wider community, and Danamon plays a role in providing financing that allows people to meet decent housing needs.

With good collaboration between banks and the government, it is hoped that people's purchasing power in the property sector can increase, as well as create economic stability through meeting the basic needs of the community.

As part of the MUFG, Danamon strengthens its financial ecosystem through collaboration with Adira Finance and Zurich Indonesian Insurance. This strategic collaboration expands the reach of Danamon's financial services to meet the needs of various segments of society.

"With the MUFG global network, we can provide comprehensive and integrated financial solutions, making Danamon a reliable financial partner for the Indonesian people," explained Ivan Jaya.

With the support of Danamon, the community is expected to achieve financial well-being, have decent housing, and private vehicles that are dream of by taking advantage of various opportunities from the current government incentive policy. In attracting active customers and maintaining sustainable growth in vehicle and property loans, Danamon and his group of companies use a holistic ecosystem approach.

In addition to financial product solutions, Danamon is active in financial education through Danamon Financial Friday, which has become an important platform to increase public financial literacy. This program provides financial education and practical information about personal financial management, including tips on saving, regulating household budgets, as well as banking product information.

With better financial literacy, the public is expected to make smarter and wiser financial decisions, such as how to own a house with KPR Danamon while managing finances for vehicle loans.