By: Eko B. Supriyanto, Chairman of Infobank Media Group
Jakarta – Debtors who have been “civilly dead” or blacklisted are now alive again. Those who have been in arrears in the past and are on the SLIK-OJK list can now get housing loans. In fact, so far SLIK-OJK has become the first door for banks to provide credit. Do not let this “sale” of forgiveness of “sins” become a disaster for banks in the future, because the debtor’s bad behavior in the past has made the bank a “trash” of bad credit.
On the other hand, the Financial Services Authority (OJK) itself will not pass bank administrators who have had bad credit, and entering SLIK-OJK must be resolved first. Bank administrators who enter SLIK-OJK will not be subject to a fit and proper test to become administrators. In fact, banks are also not interested in recruiting employees if prospective employees are blacklisted for bad credit.
Last week, OJK sold forgiveness of “sins” to blacklisted debtors. In short, OJK made sure that people with black credit records can apply for housing loans. According to Mahendra Siregar, Chairman of the OJK Board of Commissioners, there is no OJK regulation that prohibits the provision of credit or financing for debtors who have non-current quality credit.
According to Mahendra, this is shown by the practices that have been implemented by Financial Services Institutions (FSIs), where as of November 2024, there were 2.35 million new credit accounts provided by FSIs to debtors who previously had non-current credit from all SLIK reporters. In short, so far debtors who have been blacklisted have now enjoyed new credit.
OJK’s assertion could be to encourage the 3 million houses per year program. So far, many housing debtors have not passed because of SLIK-OJK problems that banks use in deciding credit. This is not wrong. Because, the banks are certainly safe credit.
It’s not just about SLIK-OJK. But, there are three important things done by OJK so that the property sector really runs well. One, the quality of Home Ownership Loans (KPR) can be assessed only based on the accuracy of payments. Only one pillar. The treatment of asset quality assessment is looser than other loans where banks assess with three pillars (business prospects, debtor performance, ability to pay).
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Two, mortgages can be subject to low risk weights and are determined granularly in the calculation of risk-weighted assets for credit risk (Credit RWA). Looser risk weights in the calculation of bank health.
Three, OJK also supports in terms of funding to housing developers. Since January 1, 2023, the prohibition on providing credit for land acquisition or processing has been lifted.
In fact, OJK has provided flexibility for housing developers to obtain financing from banks for land acquisition or processing. Banks are expected to implement their own risk management properly.
It is remarkable that OJK is giving encouragement to the property sector. However, what needs to be watched out for is the threat of non-performing loans in the future. So far, property non-performing loans are often greater than the national average non-performing loans. According to Infobank Research Bureau data, during 2024, banking NPLs ranged from 2.20%-2.42%. Meanwhile, the property sector’s NPLs ranged from 2.64%-2.72%.
That means, the risk during this time, property credit is higher. Do not let this SLIK-OJK “sin” forgiveness sale become a bad credit disaster for the banking sector. Now, although the bank’s assessment only rests on one pillar (accuracy of payment), the big risk to the bank in the future must also be the main thing, because mortgages are long-term.
In fact, do not let the pre-crisis experience where the provision of credit to buy land has become a disaster for banks. Land was pledged to the bank at a higher price. For example, a piece of land has been marked up first, then “securitized” to the bank.
Moreover, to the bank itself because until now banks were also allowed to extend credit to shareholders in accordance with the provisions of the Maximum Lending Limit (LLL). Supervision of lending to land purchases must also be stricter. Do not let the Hak Guna Bangunan (HGB) of the sea, which is currently busy, be financed by banks.
But in the end, forgiveness of sins due to debtors’ black records is not the most important thing. In the bank’s experience, many mortgage debtors are rejected, not solely because of SLIK-OJK. That requirement is important for banks. However, it is about the debtor’s ability to make monthly installments in the long term, such as the next 20 years. Will debtors with this contract work system remain smooth in the future?
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On the other hand, the price of a house that is too expensive cannot be matched by the prospective debtor’s ability to pay. So, the core of the problem is in the ability of the prospective debtor himself to pay his mortgage loan. That, OJK makes it easy about SLIK-OJK is good, but on the other hand it will also have an impact on moral hazard not to pay other loans. After all, it’s okay to get into debt, and no longer afraid of the ghost of the blacklist of debtors who must be avoided.
This low ability to pay is also due to the low purchasing power of the community. So, the key is purchasing power. It is not a matter of mere SLIK-OJK administration. SLIK-OJK is not a cause, but an effect. In fact, it is about the capacity to pay installments every month that is the main problem. To banks, be careful in lending even though there is relaxation from OJK for the housing sector. Do not let this bad credit whitening will make banks a “trash” of property loans.
And, remain vigilant lest banks become the main motor in land speculation. If that happens, then the bank is like storing a “time bomb” of bad credit. Be careful, banks have had this bad experience during the 1998 crisis. (*)