Bank Indonesia Boosts Macroprudential Liquidity Incentive to 6% in Fresh Push for Housing Sector

JAKARTA, Investortrust.id — Bank Indonesia has rolled out an expanded liquidity framework to back the national property, real estate, and construction industries, raising its Macroprudential Liquidity Incentive (KLM) package to 6%.

The central bank enacted the expanded facility in September 2026 to stimulate bank intermediation into labor-intensive real estate supply chains. The total incentive comprises a 4% allocation earmarked for direct sectoral financing alongside a 2% incentive designated for money market deepening.

Residential development operates with broad economic multiplier effects, connecting commercial lenders, building contractors, construction materials manufacturers, and informal labor. By easing reserve burdens and providing direct balance-sheet incentives for lenders targeting home purchases, monetary authorities are injecting targeted liquidity into the real economy without altering the headline benchmark policy rate.

Ample Headroom

Speaking during a coordination meeting with Minister of Housing and Settlement Areas Maruarar Sirait at the central bank headquarters on Friday, Oct. 2, 2026, Bank Indonesia Governor Destry Damayanti noted that commercial banks have actively utilized the housing credit incentive while still retaining borrowing headroom.

"For the housing, real estate, and construction sectors, the ceiling is set at 1.4% of total third-party funds (DPK)," Destry stated on Friday. "Current realization stands around 1.32%, meaning there is still a 0.08% margin that can be optimized."

The policy push has supported commercial residential loan demand over recent quarters. Between April 2025 and July 2026, the KLM incentive framework helped facilitate the disbursement of 115,927 new commercial home ownership loans (KPR), representing an aggregate value of Rp 68.35 trillion ($4.30 billion).

Beyond direct reserve requirement incentives under KLM, the central bank maintains a broader suite of supportive property rules. These include maintaining relaxed Loan-to-Value and Financing-to-Value (LTV/FTV) limits of up to 100%, enabling qualified borrowers to acquire residential property without standard initial down payments.

Low-Cost Housing Credit

Bank Indonesia has also reinforced the Macroprudential Inclusive Financing Ratio (RPIM) framework, encouraging lenders to expand low-cost housing credit targeted at low-income households (MBR). Additionally, the central bank accepts debt securities issued by state-owned secondary mortgage corporation PT Sarana Multigriya Finansial (SMF) and state infrastructure financier PT Sarana Multi Infrastruktur (SMI) as eligible underlying collateral for open market repo operations, widening funding liquidity for housing-linked institutions.

Destry affirmed that the monetary authority will continue aligning its macroprudential tools with executive initiatives to support national development goals.

"This represents Bank Indonesia's concrete support," Destry said. "Moving forward, we intend to continuously reinforce this institutional synergy."

Minister Maruarar Sirait welcomed the central bank's liquidity deployment, noting that large-scale shelter initiatives act as an engine for domestic output by engaging developers, commercial banks, materials suppliers, and micro-, small-, and medium-sized enterprises (MSMEs).

"The President views housing as a vital economic driver," Maruarar remarked. "I do not feel alone because Bank Indonesia provides meaningful backing through its policy measures."

Maruarar added that government housing priorities—including the nationwide "Gentengisasi" roof modernization initiative—rely on active credit channels to mobilize local artisans and building supply ecosystems.

"The public must know that Bank Indonesia’s policies carry a tangible, massive impact on the Indonesian economy," Maruarar said.