The Financial Services Authority (OJK) of Indonesia is actively supporting the government's program aimed at providing 3 million homes for low-income communities. This initiative, aimed at expanding affordable housing for low-income citizens, comes with several key policy changes designed to support housing finance.

In providing housing loans, known as Kredit Kepemilikan Rumah (KPR), OJK allows financial institutions to determine credit policies based on appropriate risk management. OJK has also sent letters to banks and other financial institutions, urging them to expand financing for KPRs for low-income individuals.

One of the crucial components in credit distribution is the Financial Information Service System (SLIK), which ensures neutral and accurate data. SLIK is designed to minimize asymmetric information, such as moral hazards and adverse selection, making the credit process more transparent. It also helps financial institutions apply risk management appropriately. Importantly, SLIK is not a blacklist but serves to aid decision-making in credit assessments.

Despite some concerns, OJK has clarified that there are no regulations prohibiting loans for clients with non-performing credit, particularly for small loans. As of November 2024, 2.35 million new credit accounts were issued to borrowers with previous non-performing credit, showing a flexible approach to credit evaluation.

OJK has also established a special complaints channel via Contact 157 for issues related to KPR applications, particularly in cases where information from other financial institutions is outdated. To address these complaints more efficiently, OJK plans to form a task force alongside the Ministry of Public Housing and other stakeholders.

Beyond KPR, OJK has implemented several strategic policies to support housing financing. For instance, KPRs are evaluated based on timely payments alone, in contrast to other loans that require broader financial assessments. The asset quality evaluation for loans up to IDR 5 billion only considers payment punctuality, simplifying the process for housing loans.

Another significant policy change is the reduction of risk weight for housing loans in the calculation of risk-weighted assets (RWA). This allows banks more room to lend for housing projects, supporting the government's goal of providing more homes for the people.

Moreover, OJK removed the restriction on financing land procurement and processing for housing developers starting in January 2023. This policy shift helps developers secure necessary funds for land development, facilitating the construction of new homes.

With these various measures, OJK is aligning itself with the government's ambitious target of delivering 3 million homes to the Indonesian population, focusing on the low-income sector. OJK, together with other stakeholders, is working to refine liquidity support mechanisms for housing finance, including exploring enhanced schemes for asset-backed securities in the capital market.

PHOTO: KUMPARAN