Indonesia's central bank, Bank Indonesia, has committed to supporting the nation's affordable housing initiative with a significant allocation of funding amounting to 130 trillion rupiah, equivalent to approximately $7.9 billion. This bold move aims to kickstart President Prabowo Subianto's ambitious programme to build three million affordable houses annually, as reinforced by comments made during recent economic discussions.
Hashim Djojohadikusumo, presidential adviser and brother of President Prabowo, announced this financial support at an economic forum held on February 26, 2025. He stated, “BI has agreed to provide 130 trillion (rupiah) to support the housing sector. They decided last week.” The specific details about the involvement of foreign investors were not disclosed, but their participation could potentially signal broader international interest and investment opportunities within Indonesia's housing market.
The governor of Bank Indonesia, Perry Warjiyo, confirmed the central bank's role, indicating plans to purchase government bonds within the secondary market as part of the initiative to facilitate this housing project. “BI would buy government bonds in the secondary market to support the housing scheme,” he explained, emphasizing the proactive steps being taken to back the affordable housing programme.
Further supporting the financial architecture of this initiative, Finance Minister Sri Mulyani Indrawati mentioned potential offerings of bonds directly tied to the affordable housing programme. This strategic move is pivotal as it aligns with Prabowo’s electoral commitment, where he pledged his government would deliver on building three million residences each year, signifying a substantial leap toward addressing Indonesia’s pressing housing needs.
To complement this funding initiative, Bank Indonesia has also introduced measures allowing banks to hold lower levels of required reserves contingent upon their lending to the housing sector. This regulatory adjustment aims to release around 80 trillion rupiah worth of liquidity for housing loans, effectively empowering banks to provide more financial assistance for housing projects.
The backdrop of this funding allocation is rooted deeply within Indonesia's socio-economic fabric, where access to affordable housing remains one of the most pressing challenges. Prabowo's strategy not only seeks to offer shelter but also to stimulate economic growth through construction and related sectors, potentially generating jobs and fostering community development.
With this funding, Indonesia’s government hopes to address the significant housing gap affecting many citizens. Research indicates—echoing sentiments from various stakeholders—this initiative could be transformative, altering the living conditions of countless families across the nation. Nevertheless, the successful execution of such projects will require efficient administration and oversight to maintain transparency and accountability.
Looking to the future, the impact of this financial infusion from Bank Indonesia may pave the way for innovative housing solutions, improved community planning, and enhanced living standards. This initiative not only reflects the immediate goals of the Prabowo administration but also sets the stage for long-term housing policies aimed at sustainability and inclusive growth.
Indonesia’s venture to provide affordable housing aligns with global trends where nations are increasingly confronted with urbanization challenges and housing shortages. The Nigerian example of using reserves for housing loans serves as one of many models being reviewed globally, showcasing how monetary policies can intertwine with concrete societal benefits.
Overall, as these developments progress, all eyes will be on the implementation of the funding scheme and its ability to deliver on the promises made during Prabowo’s campaign. It stands to be seen whether these ambitious plans culminate successfully, but the investment paves the way for hope and resilience among millions of Indonesians striving for basic housing.”