Wednesday, 19 August 2015

GOVERNMENT RESTRICTION ON KPR MORTGAGE AND CREDIT FOR AUTOMOTIVE INJURE SYARIAH BANKS

The financing to Value regulation (FTV) fof KPR mortgage or KKB Automotive credit applied by BI was a blow to Syariah Banks because the Syariah financing for KPR or KKB sector came to 55% of total financing.

Head of Syariah Banking Division of OJK Ahmad Buchori disclosed that total asset of syariah banking by December 2014 only grew by 12% to become Rp. 272,34 trillion. “Asset only rose by around 12%, in the past years it could be 30% which is below expectation. The most affected party by FTV rule was Syariah because of payment to property.” Ahmad said in Jakarta on Monday (1/6).

By end of December 2014 Syariah industry consisted of 12 syariah banks, 22 Syariah business units owned by conventional banks and 163 BPRS with market share totaling 4,88%.

Meanwhile the number of non-bank financial industry players (IKNB) totaled 98 institutions beyond LKM, consisting of Tafakul service (Syariah insurance) which managed asset worth Rp2,36 trillion and Syariah financing business managing asset worth Rp23,29 trillion, and other Syariah financing institutions with asset totaling Rp. 12.86 trillion.

As a whole, the market share of IKNB Syariah had come to 3,93% compared to total IKNB asset in general. Through 2013 total IKNB Syariah asset came to Rp. 41.7 trillion, while total asset through 2014 was Rp. 46.89 trillion.

The Syariah capital market itself was developed to accommodate the people’s demand to invest in stockmarket products which were in accordance with Syariah basic principle. By end of March 2015 total Syariah shares being transacted at the capital market came to Rp. 2,946.49 trillion.

Meanwhile Sukuk Corporations being traded by March 2015 came to Rp. 7.1 trillion while through 2013 it was posted at Rp. 7,55 trillion and in 2014 it dropped to Rp. 7.11 trillion. In March 2015 Syariah Reksadana being traded was posted at Rp11.16 trillion. Previously through 2013 it was posted at Rp9.43 trillion and in 2014 Rp. 11.16 trillion. SBSN State’s Sukuk released by the Government came to Rp. 208.4 trillion, higher than the previous year at Rp. 169,29 trillion.

The problem faced by Indonesia’s Syariah capital market up till now was the low number of investors doing investment, especially compared to the number of investor in the banking sector. Policy of the security exchange to lower 1 lot to become 100 lots would motivate the people to invest in the capital market.


After posting high growth in the years before, the Syariah financial service sector in 2014 was facing the challenge of economic slowdown. The challenges faced by Syariah was not easy, since global economy was not showing any significant recovery and now facing even new challenges from oil price. “In 2014 growth was slowest compared to the year before because beside the FTV factor there was also low growth factor,” Ahmad concluded. (SS) 

Business News - June 5, 2015

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