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[JAKARTA] Indonesia's central bank, hoping to spur economic growth, has reduced the minimum downpayments consumers have to pay for cars and motorcycles while increasing the percentage of a home price that a buyer can borrow.
A new regulation loosening rules for automotive and mortgage lending took effect on June 18, it said on Wednesday. "Our economy is slowing... Bank Indonesia wants to contribute to encouraging credit growth while staying prudent," said Yati Kurniati, its director of macroprudential department, told a media briefing.
Bank Indonesia now requires customers to pay a minimum downpayment of 20 per cent for motorbikes, down from 25 per cent previously.
The new minimum downpayment for passenger cars bought using credit is 25 per cent, compared with 30 per cent previously. There was no change to the rule for commercial vehicles, where the minimum downpayment remains 20 per cent.
Motorbike and car sales have fallen sharply this year. According to the latest data, motorbike sales dropped 36.5 per cent while car sales fell 18.4 per cent in May on an annual basis.
Ms Kurniati said that the maximum loan-to-value (LTV) ratios for people buying their first home rises to 80 percent from 70 per cent previously. For second homes, the maximum LTV ratio is 70 per cent compared with 60 per cent previously. For third homes, the new ratio is 60 per cent, rather than 50 per cent.
Last week, Indonesia's central bank said it intended to support growth in Southeast Asia's largest economy by loosening lending requirements for banks.