Jakarta (ANTARA) - Some new regulations and easing are required to develop the secondary mortgage market in Indonesia, President Director of Indonesia's Banking Development Institute (LPPI) Mirza Adityaswara stated.

"This is to make funding greater for the mortgage (market)," Adityaswara noted at the 71st LPPI Virtual Seminar here on Thursday.

Currently, Adityaswara remarked that financing for housing is still far as compared to the need for homeownership in Indonesia, which is mainly dominated by the lower middle class.

The LPPI president director noted that the country's young population was quite large, so the demand to own a house was very high every year.

Hence, funding for homeownership or mortgage becomes a huge requirement for Indonesia as a developing country, he stated.

Meanwhile, most funding sources for the community to own a house still come from banking products themselves, such as savings, deposits, and current accounts, he pointed out.

However, Adityaswara believes that the sources of banking funding must be widened in future, especially to fund the homeownership credit (KPR).

"Of course, one credit turnover that has a market is necessary. In developed countries, there is a market to trade housing credits," he remarked.

Adityaswara noted that in Indonesia, a similar market already exists, but the scale is not as large as in other countries, such as the United States.

Thus, he stressed that the secondary mortgage market in Indonesia requires several new regulations and their relaxation as well as other assistance from various stakeholders, ministries, institutions, banks, and other cultural agencies.

Moreover, Indonesia's ratio of banking credit to national gross domestic product (GDP) reached 35 percent, he explained.

Adityaswara noted that of the total banking credit, consumer credit covered about one-third, or about 10 to 12 percent of the GDP.

He explained that consumer banking credit included KPR, credit cards, and other financings.

Related news: Mortgage growth down 0.54% in October: BI
Related news: Longer mortgage period to accelerate home ownership

Translator: Agatha V, Kenzu T
Editor: Suharto
Copyright © ANTARA 2022