BTN Syariah And IsDB Explor Cooperation In Affordable Housing Development Cooperation

Photo: Doc. Antara

JAKARTA - PT Bank Tabungan Negara Persero Tbk (BTN) through BTN Syariah together with the Government of Indonesia have discussed with the Islamic Development Bank (IsDB) to explore cooperation regarding innovative financing schemes for the provision of decent and affordable housing.

The meeting took place on the sidelines of the 2025 Annual Meeting of IsDB in Aljir, Algeria. During the meeting, BTN Finance and Strategy Director Nofry Rony Poetra together with Deputy Minister of Housing and Settlement Areas (PKP) Fahri Hamzah and Head of the Hajj Fund Management Agency (BPKH) Fadlul Irmansyah discussed with IsDB Group President Muhammad Sulaiman Al Jasser.

"BTN Syariah is ready to cooperate with IsDB and other global investors to support the national housing development program promoted by the government," Nofry said in his official statement in Jakarta, quoted by Antara, Monday, May 26.

Nofry said that BTN, as a bank with financing expertise in the housing sector, has various sharia-based financing schemes that can be synergized with the support of IsDB.

It is possible that BTN can partner with IsDB for the implementation of pilot projects in several priority areas.

"BTN has a sharia business unit (UUS), namely BTN Syariah which is also an accelerator with its parent in providing financing for subsidized houses," he said.

"Various sharia financing contracts such as Musyarakah Mutanaqisah, Murabahah and Istishna are available to make it easier for people to have their dream homes with installment certainty," he continued.

On the same occasion, PKP Deputy Minister Fahri Hamzah said that Indonesia needs creative and sustainable financing to be able to achieve the national housing development target and reduce the housing backlog, especially for the low-income community segment (MBR).

According to the Deputy Minister of PKP, IsDB has an important role in providing technical support and sharia financing in line with the principles of sustainability and social justice.

Meanwhile, IsDB Group President Muhammad Sulaiman Al Jasser welcomed the commitment and initiative of the Indonesian government.

He also expressed his interest in further exploring the housing financing model that is being developed by Indonesia, especially those involving collaboration between national institutions such as BTN and BPKH.

During the meeting in Aljir, BTN also met with delegates from the Islamic Corporation for the Development of the Private Sector (ICD) and the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) which is also part of the IsDB to discuss possible cooperation related to liquidity needs for the national housing development program.

According to BTN, the availability of sufficient and sustainable liquidity is crucial for BTN and its sharia business units to be able to provide financial support to the housing sector on a large scale.

With the potential for funding support from sharia-based international institutions such as ICD and ICIEC, according to the company, the door will be wider open for Sharia BTN to attract funding from other sources such as the issuance of global sukuk (Islamic bonds) or sharia-based asset securitization (Sharia Asset-Backed Securities).

Meanwhile, BTN Syariah in the near future will become a sharia general bank (BUS) after obtaining permission from the Financial Services Authority (OJK) to conduct a spin-off from its parent.

By becoming a BUS, BTN Syariah will have a greater capacity in absorbing funding and channeling it as financing for housing with a sharia scheme.

Over the past 20 years, BTN Syariah has shown rapid performance in line with the increase in the needs of decent and affordable housing in Indonesia.

Based on the annual average growth rate (CAGR), BTN Syariah financing grew by an average of 21.31 percent per year.

Until the first quarter of 2025, BTN Syariah distributed financing of IDR 46.3 trillion or grew 18.2 percent year-on-year (yoy) compared to the same period last year.