OJK Offers Incentives to Banks Supporting Indonesia’s 3 Million Homes Program

JAKARTA, investortrust.id – The Financial Services Authority (OJK) has pledged incentives to encourage banks to actively support President Prabowo Subianto's ambitious 3 Million Homes program, aimed at expanding affordable housing for low-income Indonesians.

"OJK consistently encourages banks to play a proactive role as key agents of national development," said Dian Ediana Rae, OJK’s Chief Executive of Banking Supervision, during a virtual press conference on government strategic programs and financial sector reform in Jakarta on Tuesday, January 14, 2025.

The program targets households earning up to IDR 8 million per month, providing affordable financing options for both standalone and multi-story housing with repayment terms of up to 20 years.

As part of the initiative, banks are encouraged to incorporate down payment subsidies (SBUM) to enhance loan-to-value ratios for low-income borrowers. These measures are designed to reduce barriers to homeownership and bolster the program’s reach.

“The 3 Million Homes program focuses on low-income households. Subsidies like SBUM will make it easier for this demographic to access financing, while incentives from OJK will help banks optimize their support for the initiative,” said Dian.

The OJK emphasized the importance of maintaining sound liquidity and risk management practices while leveraging public funds for the program. "With attractive incentives, we expect banks to enhance their contribution to achieving the government’s housing targets," Dian added.

OJK Chairman Mahendra Siregar underscored the potential economic benefits of the housing program, particularly in stimulating growth in housing and consumer sectors, which are critical to Indonesia’s broader economic expansion.

"Housing is a key driver of economic growth. We’ve issued directives to banks and financial institutions, urging them to broaden financing opportunities for low-income families," Mahendra said.

Mahendra also noted that OJK has allowed financial institutions to tailor lending policies in line with their risk management frameworks and business strategies. This flexibility, he explained, ensures a balance between meeting development goals and maintaining financial sustainability.

"The ability to customize financing strategies based on risk appetite allows institutions to support this vital national initiative without compromising their financial health," Mahendra concluded.

The 3 Million Homes program is a cornerstone of the government’s broader strategy to address Indonesia’s housing deficit while driving economic growth. With OJK’s support, banks are expected to play a pivotal role in turning this ambitious vision into reality.