Indonesia’s Minister of Finance, Purbaya Yudhi Sadewa, is initiating a comprehensive investigation into the Financial Information Service System (SLIK), managed by the Financial Services Authority (OJK). His inquiry aims to determine whether the stringent screening of debtors for Mortgage (KPR) applications is the sole factor contributing to the low rates of home purchases this year.
Minister Purbaya harbors suspicions that even a relaxation of SLIK’s screening criteria might not significantly boost homebuying activity. He believes that approval for a mortgage does not automatically translate into the public’s immediate ability to own a home. “Even if SLIK’s oversight on KPR issuance were to be relaxed, it seems some members of the public might still not immediately be able to afford homes. We will investigate this further to determine if the low home purchases are purely due to weak demand or other obstacles,” Purbaya stated at the Coordinating Ministry for Economic Affairs office on Wednesday, November 26.
Purbaya expressed confidence that the Ministry of Housing and Settlement Areas (PKP) will align its housing distribution programs with the prevailing domestic financial conditions. This statement comes amidst a contrasting view from Minister of PKP, Maruarar Sirait, who previously identified SLIK as a primary impediment to home purchases in several regions he visited, including Bali, North Sumatra, South Sulawesi, West Java, Central Java, and East Java.
According to Minister Sirait, a significant number of mortgage applications are rejected by the OJK following review through SLIK. The system is designed to assess the eligibility of prospective debtors, typically rejecting applications from individuals with a history of problematic credit, such as loan arrears or defaults. To address this, Maruarar has proposed a direct intervention. “I will request that SLIK approve KPR applications from debtors with problematic credit histories up to a certain value,” Maruarar affirmed.
However, the Chairman of the OJK Board of Commissioners, Mahendra Siregar, has clarified that the authority does not have regulations prohibiting the provision of credit or financing to debtors with non-performing loan statuses recorded in SLIK. He emphasized that SLIK functions as a neutral information system, not a blacklist. Its core purpose is to minimize information asymmetry, thereby streamlining the process of credit and financing provision within the financial sector.
Mahendra further elaborated that the implementation of robust risk management by financial service institutions, supported by a credible SLIK, is essential for maintaining a healthy investment climate in Indonesia. He reiterated that the OJK does not restrict financial service institutions from extending credit to debtors with less-than-perfect credit quality. The use of SLIK in the assessment for housing credit or financing is merely one piece of information in the comprehensive analysis of an individual’s financial viability, not the sole determinant for approval. This ongoing dialogue underscores the complex interplay of financial regulation, market demand, and consumer creditworthiness in shaping Indonesia’s housing landscape.
Summary
Indonesian Finance Minister Purbaya Yudhi Sadewa is investigating whether the Financial Information Service System (SLIK) is the sole reason for low home purchases, suspecting public affordability and other factors might also be at play. This contrasts with Minister of Housing and Settlement Areas Maruarar Sirait’s view, who identifies SLIK as a primary impediment due to numerous rejected mortgage applications for individuals with problematic credit histories and proposes relaxing criteria for some.
However, OJK Chairman Mahendra Siregar clarifies that SLIK is a neutral information system, not a blacklist, and does not prohibit lending to debtors with past credit issues. He emphasizes that SLIK serves to minimize information asymmetry and is merely one piece of information in a comprehensive financial assessment, not the sole determinant for credit approval.
