Housing loan restrictions to be lifted by BTN
Housing loan restrictions to be lifted by BTN
JAKARTA (JP): State-owned Bank Tabungan Negara (BTN) said
yesterday it would soon lift its lending suspension for cheap
housing.
Bank president Tito Sutalaksan said the bank, which focuses
most of its financing on housing, would resume credit allocations
on Monday.
"The internal consolidation to adjust the sharp depreciation
of the rupiah is over. Now we are ready to channel our credits
again," Tito said after attending a hearing between State
Minister of Public Housing Akbar Tandjung and the House of
Representatives Commission V for public housing.
BTN suspended credit allocations on Aug. 28 following the
government's move to tighten money liquidity. The tight monetary
policy, aimed to shore up the falling rupiah, prompted an up to
30 percent increase in bank deposit interest rates.
Tito said credit would be allocated only for the purchase of
low-cost houses costing between Rp 5 million and Rp 40 million.
Interest rates on loans for cheap houses, called type 21 and
36 houses, range between 8.5 percent and 14 percent per annum.
The rates are much lower than for other house types because type
21 and 36 houses are subsidized by the government.
Tito said BTN would maintain interest rates at the previous
level for cheap houses despite the increase in interest rates on
deposits.
The BTN president said the suspension of credits for medium-
sized and large houses would be maintained.
Loans for medium-sized and large houses receive no subsidy
from the government and their rates are set at commercial levels
of between 24 percent to 25 percent per annum.
Tandjung said he was glad BTN still gave high priority to
buyers of cheap houses in its credit allocation.
He also said the government had raised its target in the
number of cheap houses to be built in the current Sixth Five-Year
Development Plan, which would end in 1999, to 600,000 from
500,000.
About 413,000 low-cost houses have been built since 1993. The
rest are expected to be completed by the end of Sixth Five-Year
Development Plan. (08)