JAKARTA - Bank Indonesia (BI) has decided to extend the loan to value (FTV/FTV) relaxation policy for loans or property financing to a maximum of 100 percent. This means that people can buy a house with a down payment (DP) of 0 percent.

BI Governor Perry Warjiyo explained that this easing aims to encourage credit growth and support economic growth. In addition, 0 percent of down payment incentives (DP) are also given to motorized vehicles.

"Bank Indonesia continues the provisions of Loan to Value / Financing to Value (LTV / FTV) on property loans/financing at most 100 percent and Bank Motor Vehicle Loans / Financing at the lowest 0 percent until December 2025," wrote BI's announcement on its official Instagram, Thursday, October 24.

For information, LTV is the ratio between the number of loans and the value of the assets purchased with the loan. If LTV reaches 100 percent, it means that home ownership credit customers (KPR) can get loans equivalent to 100 percent of the price of the house to be purchased, aka without requiring a down payment.

Previously, the policy would actually end on December 31, 2024, but then it would be extended until December 31, 2025. Where the policy applies to all types of properties, namely landed houses, flats, and shop houses or shop houses.

Previously, BI recorded credit growth in September 2024 reaching 10.85 percent (yoy). In terms of supply, strong credit growth is supported by maintained interest in lending, continued reallocation of liquid assets to credit by banks, and support for Bank Indonesia's Macroprudential Liquidity Policy (KLM).

Meanwhile, until the second week of October 2024, Bank Indonesia has distributed KLM incentives of Rp256.5 trillion to state-owned bank groups of Rp119 trillion, state-owned banks of Rp110.2 trillion, BPD of Rp24.6 trillion, and KCBA of Rp2.7 trillion.

Meanwhile, based on use groups, working capital credit growth, consumption credit, and investment loans, each amounted to 10.01 percent (yoy), 10.88 percent (yoy), and 12.26 percent (yoy) in September 2024. Sharia financing grew by 11.37 percent (yoy), while MSME loans grew 5.04 percent (yoy), improving compared to the previous month. In the future, credit growth in 2024 is predicted to remain in the range of 10 percent to 12 percent.

In addition, the resilience of the financial system is well maintained. Bank liquidity remains adequate, as reflected in the ratio of Liquid Equipment to Third Party Funds (AL/DPK) in September 2024 of 25.40 percent. Then the banking capital adequacy ratio (CAR) in August 2024 was recorded at 26.69 percent and was classified as strong in absorbing risks and supporting credit growth.

Meanwhile, the banking Non-Performing Loan (NPL) ratio in August 2024 was maintained low, at 2.26 percent (gross) and 0.78 percent (neto).


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