Banks must take human approach to home loans<\/p>\n
JAKARTA (JP): Local banks must use a \"human approach\" when
\ndealing with their home loan recipients who can no longer afford
\nto make their monthly payments, banking observer Enny Hardjanto
\nsaid on Monday.<\/p>\n
\"Banks must soften their stance because they are dealing with
\none of people's basic needs,\" she said.<\/p>\n
\"They must not enforce the existing regulations rigidly, but
\nshould instead apply the law of conscience,\" Enny told a
\ndiscussion forum on housing loans.<\/p>\n
Enny said many home loan recipients were having problems
\nmeeting their monthly payments because the loans' interest rates
\nhad soared to between 27 percent and 35 percent per year from
\nabout 19 percent since the government imposed tight money policy
\nto strengthen the rupiah in the middle of last year.<\/p>\n
Reports have said that at least 23,875 borrowers of the state-
\nowned Bank Tabungan Negara's (BTN) home loans or 2.05 percent of
\nthe bank's 1.16 million debtors had problems making their
\npayments.<\/p>\n
Most of the bank's home loans were extended to financially
\nweak borrowers at fixed interest rates, which were partly covered
\nby government subsidies.<\/p>\n
The number of home loan defaulters with private banks is far
\nhigher because unlike BTN, private banks float their interest
\nrates to current levels.<\/p>\n
According to a study conducted by the Public Interest Research
\nand Advocacy Center (PIRAC), 80 percent of the banks it surveyed
\nimposed floating interest rates on housing loans with the
\nremaining 20 percent imposing fixed rates.<\/p>\n
Enny said the banks must take a case-by-case approach to
\nresolve the bad credit problems based on the ability of each
\nborrower to pay.<\/p>\n
The loan payments should not total more than a third of the
\nborrowers' monthly incomes because the remaining two-thirds
\nshould be reserved for their daily needs, she said.<\/p>\n
Since the crisis struck Indonesia last July, many people's
\nincomes have stayed the same while their daily needs have
\nincreased in price because of the high inflation.<\/p>\n
A significant proportion of people now have lower incomes
\nbecause many employers have cut salaries to reduce costs and many
\nmore people have lost their jobs, she said.<\/p>\n
This had caused the monthly loan payments to swell to about
\ntwo-thirds of the borrowers' income instead of decreasing, she
\nsaid.<\/p>\n
\"We cannot use the same approach for all these cases,\" Enny
\nsaid.<\/p>\n
She cited as an example, that a customer who had been paying
\nfor eight years and now could no longer make the payments must be
\nexempted, even though he still had seven more years to pay.<\/p>\n
\"If a person loses his job and can't make the payments, it
\nwould not be fair for the bank to reposes his home after he's
\nbeen a good customer for eight years,\" she said.<\/p>\n
She said the banks must adjust their loans' interest rates to
\nsuit debtors' individual situations.<\/p>\n
They could also give discounts for customers who paid the rest
\nof their loans in full, so that they could at least improve their
\ncash flow, she said.<\/p>\n
Another alternative to resolve the home loan repayment problem
\nwould be for the banks to extend the period of their loan terms.<\/p>\n
The banks could extend the credit period to 20 years from the
\npreviously agreed 15 years and make the borrowers pay the balance
\nof the interest rates increase at the end of the period.<\/p>\n
Enny said banks which gave housing credits had been operating
\nwith negative spread because they offered high deposit interest
\nrates of about 50 percent while they only charged 27 percent to
\n35 percent for their housing loans.<\/p>\n
Lawyer Luhut Pangaribuan said yesterday home loan recipients
\nmust organize themselves to strengthen their negotiating position
\nwith the banks regarding their inflated loans.<\/p>\n
He said borrowers could make bilateral negotiations, but if
\nthat failed, they could file a class-action suit against the
\ncreditors and declare a force majeur.<\/p>\n
Customers could use the argument that their inability to pay
\nwas caused by the government's faulty measures, such as allowing
\nhigh foreign debts and imposing high interest rates, Luhut said.<\/p>\n
\"Creditors will unlikely stay adamant, because they are
\noutnumbered by the borrowers,\" he said.<\/p>\n
\"It will cost much money and take a long time to settle the
\ndisputes legally, and they (the banks) would likely lose the
\ncase.\"<\/p>\n
Monday's forum on the \"Roots and solving the problems on home
\nloans\" was conducted by PIRAC. It was also attended by the
\ngroup's researchers Yusuf Shofie and Zaim Saidi, and lawyer
\nAbdulhakim Garuda Nusantara. (das)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/banks-must-take-human-approach-to-home-loans-1447893297",
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