Hurry Up! BI Ensures That 0 Percent DP Applies For All Community, As Long As...

Illustration of Car (Photo: By courtesy)

JAKARTA - Assistant to the Governor, Head of the Macroprudential Policy Department of Bank Indonesia (BI) Juda Agung said that the policy of down payment for credit or motor vehicle financing of at least 0 percent applies to all people.

"But what needs to be remembered is that the 0 percent DP depends on the results of the assessment from the bank and the leasing provider that provides credit," he said in a webinar Monday, February 22.

Juda added, BI as the monetary authority only provides an overview of policies that can be carried out by financial industry players, and not as a policymaker in the downstream sector.

"Here, BI provides space for banks and financing institutions to provide credit without DP. But again, the assessment of each agency will determine who can use this facility because they know the risk profile of each customer," he said.

As previously reported, the agency led by Perry Warjiyo relaxed the provision for down payments of up to 0 percent for all types of new motorized vehicles.

This is intended to encourage credit growth in the automotive sector while still observing the principles of prudence and risk management, and will be effective from 1 March 2021 to 31 December 2021.

BI itself implements one of the main requirements, namely that banking institutions that have a non-performing loan (NPL) ratio of below 5 percent can provide this facility to customers.

Meanwhile, banks with NPLs above 5 percent may only provide the same facilities to consumers with a maximum DP discount range of 90 percent to 95 percent.

In addition to the automotive sector, the central bank has also set steps to loosen the loan to value (LTV) ratio of credit and property financing to a maximum of 100 percent for all types of property (landed houses, flats, shop houses, and office houses).