Economic Development through Mortgage Loan Distribution in Indonesia

Abstract

The growing population of Indonesia is increasing every year, which also leads to the growing need for people's residences. Of course, this affects the financial sector in terms of mortgage loans. Therefore, this paper is a study of the factors that affect the distribution of mortgage loans in Indonesia. This study uses multiple linear regression with ordinary least square analysis with the variables Residential Property Price Index, Lending Rate Credit, and Gross Domestic Product as the independent variable (X) and distribution of mortgages as the dependent variable (Y). The data used in this study are the quarterly time series from 2009 to 2021. Based on the results, the variables Residential Property Price Index, Lending Rate Credit, and Gross Domestic Product have a significant influence on mortgage loan distribution in Indonesia. So, the hope is that the government and the banks can wisely set Lending Rate Credit based on the Gross Domestic Product level of their territory.