Jakarta. State-Owned Enterprises Minister, Erick Thohir, has called on both state-owned and private companies to contribute towards providing 1.5 million homes annually to address the national housing backlog, currently standing at 12.7 million.

Erick highlighted the growing challenge of meeting the increasing demand for public housing, especially as urban populations are projected to surpass rural areas by 2035.

He emphasized that the current strategy of delivering 600,000 to 800,000 homes each year is no longer adequate.

"In other words, achieving a breakthrough to reach figures of 1 million to 1.5 million (housing provisions) per year in the future is necessary. State lender Bank Tabungan Negara (BTN) and Mr. Basuki (Minister of Public Works and Public Housing Basuki Hadimuljono) are actively involved in this. We need to put in even more effort," said Erick during the 74th-anniversary celebration of BTN and the introduction of the company's new logo in Jakarta on Sunday.

Basuki Hadimuljono stressed that BTN must lower interest rates for non-subsidized homeownership loans (KPR) in alignment with the company's transformation.

"For me, going forward, BTN must demonstrate a change in attitude towards greater efficiency. The interest rates for non-subsidized KPR must be reduced. If it cannot be reduced, the changes in BTN are meaningless," said Basuki.

BTN's CEO, Nixon LP Napitupulu, states that the company is catering to the housing requirements of middle-income individuals earning between Rp 8 million ($508) and Rp 15 million monthly. This demographic, primarily composed of millennials, falls below the upper-middle-class bracket but does not qualify as low-income earners.

"We encourage the reduction of upfront costs, such as expensive insurance premiums, 5 percent Land and Building Rights Acquisition Tax (BPHTB), and 11 percent Value Added Tax (PPN). If reduced, housing becomes more affordable, making the installments and tenure longer, around 30 years," he elaborated.

Nixon hopes that through this mechanism, the absorption of home ownership loans in the middle-income community, especially among millennials, will increase.

BTN's total assets have reached up to Rp 440 trillion as of 2023, a 9.1 percent growth compared to the same period last year.

In addition to assets, Nixon also revealed that BTN achieved a record double-digit credit growth of 11.9 percent, amounting to Rp 334 trillion. Furthermore, BTN successfully gathered a total of third-party funds amounting to Rp 349.93 trillion, representing an 8.7 percent increase compared to the previous year.