By: Dewi Astarini )*
The government, in collaboration with national banks, is preparing a massive IDR 130 trillion Housing People’s Business Credit (KUR) scheme, which is being called one of the most aggressive and pro-people housing financing interventions in the history of housing policy in Indonesia. This massive fund is not only intended to help low-income communities obtain decent housing, but also to stimulate the entire housing economy ecosystem, from small developers, local contractors, building supply stores, to casual construction workers.
The Minister of Housing and Settlement Areas (PKP), Maruarar Sirait, stated that the government is ready to launch the IDR 130 trillion Housing KUR to boost national economic growth. The Housing KUR is a breakthrough step by the government to stimulate the national economy. This KUR targets players in the construction sector, such as contractors, developers, and building supply stores, with a 5% interest subsidy scheme from the government. Furthermore, the Housing KUR policy can also provide a significant boost to micro, small, and medium enterprises (MSMEs). The public can take advantage of the Housing Business Credit (KUR) program with a 6% interest rate for loans up to IDR 500 million. This scheme is considered capable of boosting the economy of low-income families, especially housewives and small business owners, to strengthen their families’ finances.
From the banking perspective, national banks such as Bank Mandiri, BRI, BNI, BTN, and specialized housing finance institutions have expressed their readiness to distribute this financing as part of the national mandate to provide housing for the public. BRI President Director Hery Gunardi stated that the KUR distribution demonstrates BRI’s role in expanding financing access for MSMEs. BRI’s KUR distribution is still dominated by production sectors, such as agriculture, fisheries, manufacturing, trade, and services. This portion reaches 64.31 percent of total financing. Consumer Credit Growth is Increasingly Weak Kompas.id Article Of this amount, the agricultural sector is the largest contributor, with IDR 58.37 trillion, or 44.83 percent of the total KUR disbursed. KUR plays a dual role: in addition to providing capital, it also strengthens the real sector and creates jobs in various regions. BRI data shows that the reach of the People’s Business Credit (KUR) program to households continues to increase.
According to Hery, KUR plays a dual role. In addition to providing capital, it also strengthens the real sector and creates jobs in various regions. BRI data shows that KUR’s reach to households continues to increase. By the end of September 2025, approximately 18 out of every 100 households in Indonesia had accessed BRI’s KUR facility. This figure is up from 14 households in 2022 and 15 households in 2023.
This pattern marks a shift in approach, not just about mortgages for homebuyers, but also financing upstream and downstream working capital to ensure that homes are actually built, have sufficient stock, and remain affordable. The government stated that this type of collaboration has never been done on such a large scale before.
The immediate target of this policy is the acceleration of the 3 Million Houses Program, a government priority agenda to address the national housing backlog, especially for low-income groups who have previously struggled to enter the formal housing market. Cabinet Secretary Teddy Indra Wijaya explained that the government continues to actively monitor the KUR Housing and Subsidized Housing programs. The government hopes that the Rp130 trillion in financing support will encourage the construction of hundreds of thousands of new subsidized housing units within the current year, including modest landed houses in rural areas and affordable vertical housing in major cities. This strategy is also seen as a concrete way to maintain people’s purchasing power through access to legal, safe, and livable housing.
The government views the Housing Business Credit (KUR) as a direct and indirect job creation engine. When a subsidized housing project is underway, not only do builders working in local building material stores benefit, but material transportation also improves, new plots are cleared, and local contractors can move up the ranks from small projects to recurring projects. The ripple effect is expected to extend to the MSME sector surrounding housing areas, such as catering for workers, transportation services, document printing, and even small-scale legal services for processing house documents. One of the government’s ongoing emphasis is that the Housing Business Credit (KUR) is not just a loan for homebuyers, but also provides working capital for small developers, encouraging them to expand their capacity. Many regionally subsidized developers have been hampered by initial capital constraints, such as the need for funds for land clearing, land filling, and the purchase of initial materials. While payments from home buyers are only disbursed later through the subsidy scheme.
With access to low-interest credit and distribution focused through national banks, pThe government hopes that the classic obstacle of “projects stalled midway due to funding bottlenecks” can be significantly reduced.
In addition to affordable funding support, the government is also streamlining fiscal incentives to lower the total cost of first-time homeownership. Policies such as exemption from Land and Building Acquisition Tax (BPHTB), reduction or exemption from Building Approval (PBG) fees, and Government-Borne Value Added Tax (PPN DTP) are considered a comprehensive package to prevent young families from being put off by high initial costs.
Ultimately, the policy direction is clear: housing for the people is not just about walls and a roof, but also an instrument for economic equality. The government wants the housing sector to become a locomotive for growth, opening up construction jobs in the regions, stimulating MSMEs in the building materials sector, and simultaneously addressing the homeownership backlog that has plagued the working class for years.
)* People’s Economy Observer
