TEMPO.CO, Jakarta - The Financial Services Authority (OJK) plans to lower the amount of loan to value (LTV) on mortgages and vehicle loans. The easing is aimed at increasing the volume of loan disbursement by banks.
OJK chief Muliaman D. Hadad said the LTV for housing and vehicle loans will be cut from the current 20-30%.
Mr. Hadad said the OJK will work with Bank Indonesia to decide the amount of LTV. "We are evaluating the LTV now," he said yesterday as Bisnis Indonesia reported.
On September 30, 2013, BI imposed the LTV limit for conventional banks to prevent credit risk increases.
Last year, housing loan credit growth decelerated by 12.5 percent (yoy), despite increasing in value to almost Rp600 trillion.
From 2011 to 2014, the average non-performing loan ratio remained below five percent.
AGUSSUP | DEVY ERNIS
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