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)