BTN will lower rates on home loans

BTN will lower rates on home loans

JAKARTA (JP): Bank Tabungan Negara (BTN) will lower the
interest rate on its loans for low-cost houses from its current
level of 16 percent per annum to help low-income people own
homes, the state-owned bank's president said yesterday.

Widigdo Sukarman told reporters after a hearing with
Commission V of the House of Representatives (DPR) that the
planned reduction of the interest rate by more than one percent
is also aimed at encouraging developers to build more low-cost
houses.

He said so far the pace of the development of low-cost houses
is slower than the growth demand.

Widigdo said Bank Tabungan Negara currently holds a sufficient
amount of funds that can be used to support the reduction of the
lending rate. The exact new rate will be announced at a later
date.

Besides public savings, the bank also manages funds from the
government and two-step loans from other countries.

Widigdo acknowledged that developers generally face
difficulties in providing low-cost houses due to high interest
rates and increasing prices of land.

When asked about the bank's problem loans, the executive
explained that the total amount of its bad and doubtful loans as
of July reached Rp 48.78 billion (US$22.55 million) or 1.26
percent of its total credits of Rp 3.8 trillion, which had been
extended to 743,303 borrowers.

He said that 74 percent of the bank's credits are extended to
buyers of low-cost houses.(05)