DEVELOPMENT OF FINANCING THROUGH BANK ASSET SECURITIZATION: A STUDY OF POLICY AND MARKET READINESS

Nurkholisoh Aman, Indra Gunawan, Meily Ika Permata, Stella Grace, Suhari Santosa, Astrilia Liscagita, Aninditha Kemala Dinianyadharani, Zaky Irtny Novtra, Ida Ari Kusumawaty, Farah Muthia Syifa, Sagita Rachmanira and Kevin Joshua Sinaga
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Indra Gunawan: Bank Indonesia
Meily Ika Permata: Bank Indonesia
Stella Grace: Bank Indonesia
Suhari Santosa: Bank Indonesia
Astrilia Liscagita: Bank Indonesia
Aninditha Kemala Dinianyadharani: Bank Indonesia
Zaky Irtny Novtra: Bank Indonesia
Ida Ari Kusumawaty: Bank Indonesia
Farah Muthia Syifa: Bank Indonesia
Sagita Rachmanira: Bank Indonesia
Kevin Joshua Sinaga: Bank Indonesia

No WP/08/2025, Working Papers from Bank Indonesia

Abstract: Since its introduction in the 1970s, securitization practices have evolved to facilitate various funding needs for projects with potential cash flows. Derived from traditional lending, securitization is conducted through a re-engineering scheme that separates institutional risk from the risk of the underlying assets. Generally, assets that can be securitized are those with potential future cash flows, such as mortgages, auto loans, credit card receivables, royalties, and others. In Indonesia, securitization practices began to develop in the 2000s. Although institutional infrastructure is not yet fully in place, the increasing funding needs to drive economic growth, amidst the limitations of traditional funding sources (bank credit), have prompted various parties to initiate the use of non-traditional financing sources. One such source is asset securitization. This study seeks to examine and identify several issues faced in the asset securitization process in banks, including regulatory, institutional, infrastructure, and ecosystem aspects. The research is expected to complement existing references on securitization practices in Indonesia. Additionally, some recommendations proposed are expected to drive initiatives to complete and refine various aspects necessary in the securitization process.

Keywords: asset securitization; housing finance; financial market deepening; regulation; Indonesia (search for similar items in EconPapers)
JEL-codes: A11 B11 C11 D11 F11 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2025
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