BTN Promotes Subsidized Mortgages at the World Sustainable Finance Forum

BUSINESS INFO - PT Bank Tabungan Negara (Persero) Tbk (BTN) reaffirmed its strategic role in supporting the transition to a green economy by introducing Subsidized Home Loans (KPR) in Indonesia at the United Nations Environment Programme-Finance Initiative (UNEP-FI) Regional Roundtable on Sustainable Finance Asia Pacific held in Suzhou, China. At this global sustainable finance forum, the Subsidized Home Loan in Indonesia was presented as a solution that creates widespread benefits while still driving sustainable financial performance growth.

BTN’s Director of Risk Management, Setiyo Wibowo, stated that BTN is a very unique bank in Indonesia. This is because BTN not only carries out an important mission to fulfill the need for affordable housing in line with President Prabowo Subianto's National Housing Program, but also continues to provide sustainable returns. Furthermore, he added, out of approximately 70% of consumer loans at BTN, 90% are KPR loans accessed by low-income communities.

“BTN's subsidized mortgages in Indonesia are not only a solution to the challenge of providing decent and affordable housing for low-income communities. For BTN, subsidized mortgages are also one of the driving forces behind its business. This proves that social value and profitability can go hand in hand,” said Setiyo at the UNEP FI Regional Roundtable on Sustainable Finance in Suzhou on Thursday (June 19).

Setiyo explained that the subsidized mortgages provided by BTN have a very tangible social impact. Among other things, these products serve as a means of financial inclusion for low-income families. In addition, of the total BTN mortgages, 61% are accessed by borrowers living in suburban and rural areas. Furthermore, approximately 68% of BTN mortgage borrowers are in the productive age group of 30–60 years old. Additionally, 31% of BTN mortgage borrowers are women, reflecting the company's efforts to promote inclusive financing where there is equality between men and women in home ownership.

According to him, careful portfolio management is key to addressing the dual challenges of profit and impact. BTN continues to develop adaptive risk management practices in line with increasing climate risks such as floods and fires.

“We continue to optimize our portfolio not only to generate profits but also to strengthen our social contribution and minimize climate risks. Profit and impact must go hand in hand,” explained Setiyo.

Meanwhile, BTN’s transformation toward sustainable finance began in 2023. The process started with implementing an Impact Analysis based on the UNEP FI Principles for Responsible Banking (PRB) and establishing a comprehensive Environmental, Social, and Governance (ESG) framework. The goal is for BTN’s business to align profits with environmentally and socially responsible principles.

With this strategic move, BTN also became the first state-owned bank in Indonesia to sign the UNEP FI PRB and publicly report on its banking responsibility progress. Through this framework, BTN also began developing the Low Emission House program. This program is one of the steps taken to reduce the carbon footprint from the infrastructure side.

“Through the Low-Emission Housing program, BTN aims to provide solutions to address the climate crisis, fulfill its social mandate, while still generating positive profits,” concluded Setiyo.

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