BNI to provide low-cost housing credits soon

JAKARTA (JP): Bank Negara Indonesia, the country's top commercial bank, will provide low-cost housing credits beginning next year as part of its program to increase retail borrowers.

BNI's president Widigdo Sukarman announced yesterday the bank's program to provide the cheap housing credits would also aim at providing more financial access for low-income people to own houses.

"But we cannot disclose yet the scheme of the program, including the amount of credits provided and the lending rates for the housing credits," he told members of the press after speaking at a workshop held by the Association of Real Estate Developers (REI) yesterday.

"I do not have the figures for that in my hand now right now," he said.

He said that the bank was now assessing the program and that it expected to have subsidized crediting from Bank Indonesia, the central bank, to finance the low-cost housing credit project.

Widigdo said that BNI would not compete with state-owned Bank Tabungan Negara (BTN) with the new credit scheme but instead it would help it provide credit to low-income people.

The publicly-listed BNI, which is controlled by the government, currently extends most of its credits to corporations while BTN focuses its operations on home loans.

Analysts viewed that BNI's move to provide low-cost housing credits was a warm-up before a merger of the two banks.

BTN may merge with BNI as part of the country's financial reforms in the country's ailing banking industry, according to the analysts.

BTN's president Tito Sutalaksana, however, declined to comment on merger speculations saying that he knew nothing that would warrant such rumors.

"We do not know of any such plan," he said.

"But if BNI provides low-cost housing credits, it will be good for us," he said.

BTN's Tito Sutalaksana said yesterday that the bank had financed the construction of at least 1.43 million low-cost housing units since 1974.

He said that during the January to October period of this year alone, BTN had financed 147,884 units of low-cost houses worth Rp 1.21 trillion.

The bank previously projected that it would finance 144,678 low-cost housing units valued at Rp 1.24 trillion in 1997, he said. (aly)