Indonesia mulls 40-year mortgage scheme as BRI CEO downplays risks

Bank Rakyat Indonesia (BRI) has addressed the risk management of a proposed 40-year mortgage scheme being deliberated by the government.

BRI’s CEO Hery Gunardi stated that longer mortgage terms would not be fully utilised by all customers, but adjusted to individual needs. Borrowers are permitted to repay before the 40-year term.

” The government may offer longer terms, but not everyone will use the full 40 years. Some may opt for 10, 20, 15, or 25 years,” Gunardi said during an interview at BRI headquarters on Monday (25 May 2026).

He noted that on average, mortgage borrowers repay loans within 10 years. Thus, extending the term to 40 years would not pose significant risks to the bank.

“Looking at past experience, even with 25 or 20-year terms, the average repayment period is 10 years,” Gunardi added.

BRI emphasised it maintains robust internal controls over mortgage disbursement processes to prevent any irregularities.

” All business processes have internal controls, compliance checks, and audits to ensure every step adheres to procedures,” Gunardi stated. “Without oversight, things could go astray”

This follows a meeting with Housing and Settlement Minister Maruarar Sirait to discuss subsidised housing financing and KPP ( housing loan) schemes.

During the meeting, Sirait reported BRI had disbursed IDR 9.21 trillion for KPP, or 76% of its IDR 12 trillion allocated ceiling, accounting for 54.6% of national KPP disbursement.