Wahyudi, N. L. (2019). Optimizing of Public Housing Financing Policies for Low Income Community in Indonesia: Conceptual Approach. Archives of Business Research, 7(1), 230-244. Optimizing of Public Housing Financing Policies for Low Income Community in Indonesia: Conceptual Approach

Evolution on housing finance policies and development of public housing for low income community (MBR) are interesting phenomenon which have inspired a study to optimize its financing strategically. Conceptually, there are two approaches on analyzing on public housing financing policies for MBR, namely: i) the market or supply chain approach, and ii) good governance approach. Market approach is focusing on business supply chain between actors interaction in demand and supply responively. While the approach of good governance or partnership is the interaction among the stakeholders (stakeholders), especially between the agent or regulator with the actors or operators in executing to promote housing development towards more credible and adaptive. This good governance approach is deeply explored in the partnership among financial institutions such as banking, insurance. . To get the findings and recommendations, this paper explores a reference not only on theoretical study, potential financing based on the existing legal basis of potential funding sources qualitively. The next exploration are the developments in the availability of housing for MBR. Analysis of housing finance optimally explores on three (3) sub-topics, namely: i) the target housing finance MBR, ii) the establishment center of revolving fund institution (PPDPP), iii) Secondary Financing Company (PT SMF). Hopefully, implementing these concept could promote public housing development more conducive resulted in less shortage or backlog of apropriate public house for low income society in Indonesia.


Recent developments in realization of housing budget allocation for MBR
Meanwhile the performance of development of public housing can be seen in the table below  -1 shows that the role of realization of FLPP in IDR to total amount public house unit should be promoted. On average the realization of unit of public house is less than 10 % to public house development targeted by government should be reached 1 million yearly unit since 2015. As a result, there is a need to optimize public house finance to MBR strategically. In other words, there is a need to explore the experience of public housing financing scheme for its lesson learnt. Conceptually, there are two approaches on analyzing on public housing financing policies for MBR, namely: i) the market or supply chain approach, and ii) good governance approach. Market approach is focusing on business supply chain between actors interaction in demand and supply responively. While the approach of good governance or partnership is the interaction among the stakeholders (stakeholders), especially between the agent or regulator with the actors or operators in executing to promote housing development towards more credible and adaptive. This good governance approach is deeply explored in the partnership among financial institutions such as banking, insurance.

Analytical Framework
As mentioned sub topic 1.1 above, it describes the evolution of financing scheme in housing development program. While in sub-topic 1.2 above, it illustrates a decade of performance for implementation on financing scheme. Conceptually the government's efforts to build supply chains and strengthen institutional governance of financing. Thus, it is necessary to explore government policies and strategic systematically. The objective this exploration to obtain the findings and recommendations of strategicaly steps in optimizing the sources of housing funding to finance an affordable housing prices for MBR. As a result, this analytical framework presents methodology of this paper.
As an explorative study, this paper will present a framework of discussion consisting 4 (four) topics. The first topic is an introduction that presents the problems and solutions of housing development from the aspect of financing. The first topic consists of 3 (three) sub-topics, namely: i), Evolution of finance sheme, ii) Reralization on development public housing based on FLPP, iii) analytical framework. Furthermore the second topic will present Housing Development Program This second topic consist of three subs topic, namely i) Definition Low-Income Communities (MBR), ii) Target of housing development for MBR ,iii) The development of housing finance schemes. Furthermore the third topic is analysis of housing financing source of MBR.. This third topic consists of 3 (three) sub-topics, namely: i) Financing Policies and Strategies, ii) Revolving Funds Public Company -Centre of Agency Revolving fund for public housing (BLU -PPDPP), and iii) Partnership Analysis in the concept of Good Corporate Governance.
As the final presentation in this paper, the fourth topic will present the findings and recommendation of strategically steps in optimizing housing funding to finance for MBR.

HOUSING DEVELOPMENT PROGRAM Definition Low-Income Communities (MBR)
Law No. 1 of 2011 on Housing and Settlement Area (PKP) states that the Government obliges to provide incentive and / or program for MBR (Low Income Society) to get Public House either in the form of single house, or row house, or apartment. This law is expected as a legal basis to find out the problem of shortages or backlogs of apropriate house by 13.6 million units (Census BPS 2010). It implies that then If the shortage of this house must be provided by the Government within 20 years, then the need for house procurement of 460 000 units per year. In addition, if every year it needs an additional 800 000 units based on population growth, then it is necessary to provide housing for 1 260 000 units yearly. Officially solve to this issue, , the Government of "Jokowi"has launched a house development program of 1 million units yearly in April 2015. Furthermore, this program is one of the 10 (ten) priority programs in 2016. The details of providers, users and financing sources can be seen in table 2 as follow.   The development of housing finance schemes In Article 1, paragraph 24 of Law No. 1 of 2011 on Housing and Settlement Area states that the Low Income Society hereinafter abbreviated as MBR is a society with limited purchasing power so that it needs to get government support to obtain a house. In other words, MBR is a society that has: i) limited purchasing power, ii). Needs government support iii) obtaining a house (single, array, stack).
The form of ease is set forth in the credit agreement or financing agreement for the acquisition of houses for MBR as set out in paragraph (4). For the implementation of the provisions set forth in paragraph (5) which stipulates the provisions concerning the MBR criteria and requirements for the ease of obtaining housing for MBR as referred to in paragraph (2) and paragraph (3) shall be regulated by Ministerial Regulation The government continues to develop financing schemes from various sources available to encourage the purchasing power of underprivileged communities through various types of subsidized KPR. The development of housing finance assistance scheme can be seen in table-4 below.  . In detail the budget allocation plan is shown in appendix 2 tables l-2.

ANALYSIS OF HOUSING FINANCING SOURCE OF MBR Financing Policies and Strategies
The financing aspect to prioritize this priority program, the government launched 3 (three) strategically policies, namely: i) creating affordable and accessible housing financing; ii) creating a conducive climate for improving supply side performance; and 3) ensuring the availability of low-cost funds in the long term. The complete stratecical policies and strategies for housing financing 2015 -2019 are in table l-1 in appendix-1. In other words, the government fasilties to encourage the availability of demand-based housing (Demand) and supply side (Supply) supported by a conducive long-term financing system. To implement this strategy, the government is improving institutional governance both in terms of strengthening existing institutions and establishing new institutions. Improvement of institutional governance is expected to accelerate the procurement of decent housing in terms of demand and supply side responsively.
On the demand side, the Government stimulate Public purchasing power by providing various forms of subsidies. In addition, government is not only acts as a regulator but also as joint operators of private and community for integrating exiting policies to provide affordable house prices. On the supply side, as a regulator, the government established Kemenpera short, Institutional setting on optimizing source of funding to finance affordable housing for MBR is government strategy to reduce a shortage of public housing.
In detail the government policies and strategies contained in the seventh section of article 54 in paragraphs as follows: (1) The Government is obliged to fulfill the housing requirement for MBR.
(2) In order to meet the housing needs for MBR as referred to in paragraph (1), the Government and / or local government shall provide facilities for the construction and acquisition of houses through a gradual and sustainable housing development planning program.
(3) The ease and / or assistance for building and obtaining housing for MBR as referred to in paragraph (2) may be in the form of: a. Subsidy for the acquisition of a house; B. stimulant self-help house; Incentive taxation in accordance with the provisions of laws and regulations in the field of taxation; Permissions; E. Insurance and guarantees f. land information legalize land letter; and / or, facilities, and public utilities. 4) the ease of provision as referred to in paragraph (3) letter a shall be stated in the credit agreement or financing agreement for the acquisition of the house for low income community (5) provisions on MBR criteria and requirements for ease of of houses for MBR as referred to in paragraph (2) and paragraph (3) shall be regulated by Ministerial Regulation In summary, the above clause describes the related policy of meeting MBR's supply and demand for home procurement. Particularly in paragraph 5 raises the criteria of the main discourse on the understanding of the limitations of purchasing power and which institutions are entitled to compile considering that several institutions have been arranged in relation to the MBR. Criteria that have been compiled are listed in Figure-1 and table-4 above.
Theoretically, the analysis of the optimal of the source of housing finance with the affordable price can be analyzed by 2 (two) concepts, namely: i) Supply Chain Concept and ii) The Concept of Institutional Relations Governance.

Partnership Analysis in the MBR Housing Supply Chain
The basic concept of supply chain is presented by Agustinus Purna Irawan in Supply Chain Management Textbook (Faculty of Engineering Tarumanagara University, August 2008). This concept sets forth the Supply Chain Management Philosophy (SCM). The philosophy is how to manage supply of goods from raw material sources to customers as an integrative entity rather than managing supply of goods as a series of separate activities.
Develop partnerships and co-partnership with organizations both upstream and downstream. The diagram of the relationship between partnership and Co-Maker ship is shown in Figure -1 below. This model is useful for identifying some of the main activities and supporters commonly encountered in various business activities. The value chain only highlights some special activities that enable the company to create value and thus make the model a useful tool for simplifying analysis. To optimize the source of bank financing for Home Ownership Loan (KPR) and funding for developers in order to affordable housing prices, APBN financing acts through BLU PPDPP and PT SMF. Full picture based on the concept of supply chain flow can be seen in Figure-2 below. Material Flows the PPDPP is stipulated as a Government Institution applying the Financial Management of the Public Service Agency. PPDPP has the main duty to channel and manage government investment funds for housing finance for Low Income Communities (MBR). The allocation of state budget funds sourced from the Directorate General of Treasury is channeled through PPDPP to finance home ownership for MBR with a revolving fund management scheme that channeled in collaboration with banks through an FLPP facility with an "executing" pattern.
KPR -FLPP (Mortgate rate subsidy) is a program of assistance and ease of acquisition of houses for MBR (Low income community) with low interest rate of 5% fixed, credit period up to 20 years, low interest, free of VAT and free of insurance premium and fire insurance. MBR who have obtained KPR FLPP assistance must occupy the house, if MBR does not occupy the house (empty, transferred or leased), will be subject to two sanctions namely criminal sanctions based on Article 152 UU No. 1 of 2011 on housing and Settlement Area, with the largest fine 50 million rupiah and sanctioned the return of assistance that has been obtained in order to channel the channeling in collaboration with the banking through housing financing liquidity facility (FLPP) with the executing-scheme.
The points of legal basis for the implementation of FLPP is as follows: • The establishment of PT SMF is stated in Presidential Decree 1/2008 Jo.19 / 2005, and the Regulation of the Financial Services Authority (POJK) No.23 / POJK.04 / 2014. In this mandate PT SMF plays a role in strengthening Indonesia's financial markets and supporting the development of domestic investor base PT SMF plays a role in channeling loans to banks through funding from the capital market. Banks that get loan disbursements are not only conventional banks but also sharia banks and regional banks. In addition, SMF serves to encourage the banking sector to conduct securitization through the Issuance of Asset-Generated Securities issuing instruments (EBA-SP). The advantage of banking securitization is to reduce credit risk on mortgages due to the risk of mismatch. Through securitization, banks get their liquidity back so it can be channeled again to the community in the form of KPR. In addition, debtors whose receivables are securitized receive long-term financing from the capital market

Partnership Analysis in the concept of Good Corporate Governance
Given the above picture 2 suggests a partnership relationship in the concept of supply chain then it is necessary to put forward the relationship of partnership in the concept of Governance. In the concept of Good Corporate Governance, Stakeholders or stakeholder procurement, there are 3 (three) parties namely i) State or bureaucrats, ii) Industry or market actors and iii) Community or community. These three stakeholders have a characteristic business process based on their vision and mission. Ideally, the interaction of the three stakeholders can be seen in Figure- (Dellas et al., 2011a). This paper attempts to analyze housing development issues using the concepts introduced by Lemos and Agraval in 2009. This concept introduces the governance of interactions between agents and actors. Actors refers to the individuals, organizations, and networks that participate in decision making related to the earth system governance (Biermann et al., 2009a). An agent (authoritative actor) is an actor who possesses the ability to prescribe behavior and to obtain the consent of the governed. Authority refers to legitimacy and capacity to exercise power, while power refers to the capacity to influence an outcome of events, with or without the legitimacy to do so. Agents contribute here to purposeful steering of the constituents, either indirectly (by influencing the decisions of other actors) or directly (by making steering decisions).
In the context of public housing procurement the government's vision is to provide a proper home at an affordable price. While the vision of market participants is "going concern" or gain a sustainable advantage. While the vision of community institutions such as environmental NGOs is the availability of homes that are habitable and environmentally friendly. The partnership between government and business or developer is public private partnership (PPP) or Public Private Partnership (PPP). The partnership between Community and Business Actors is Social Responsibility and Environment (CSR) or Corporate Social Responsibility (CSR). While the mutual benefit between government and society is community development program or Community Development (CD)on infrastructure. The program that was launched was Kampongs Improvement Program (KIP). This program is implemented by the Directorate of Cipta Karya (construction Design) which has international funding support such as World Bank (WB) and Islamic Development Institutionally, stakeholders or public interest in optimizing source of financing consist of 3 (three), namely: i) Public Development Financing Agency of Housing Development (BLU-PPP), ii)developers and iii) Executing Bank. The relationship between these three institutions is contained in Figure 4  In addition, the BLU-PPDPP analyst team has identified the role of among stakeholders to improve its role on its strategic partnerships as follows: Local Government • Provision of land for the construction of housing projects •Providers of long-term funds for Regional Development Banks (BPD).
• Land bank initiator FINDINGS AND RECOMMENDATIONS In conclucion, there are 3 (three) strategically aspect in public housing development policies should be synergized for optimizing its source of fund in the future. The 3 (three) aspects might be described as: i) the existing regulatory framework, ii) potential sources of funding to finance affordable public housing, and iii) experience in the financing scheme. The synergized among those three aspects are the corner stones of the success of the MBR housing development program. The regulatory framework stated in Law No. 1 of 2011 on Housing and Settlement Area of targeting effectiveness (Article 1 paragraph 24 and article 54 paragraph (2), (3) and (5) . While optimizing the sources of financing listed on Article 126. The Government of Indonesia has experience in housing financing schemes for low-income people (MBR) more than 4 (four) decades, while the sources of funding through implementing banks product in the form of: i) PMP (equity participation), ii) RDI (account of Investment Fund) , iii ) KLBI (Central Bank Liquidity Aids), iv) World Bank loans, and v) State budget expenditure allocation.
Conceptually optimizing these sources of fund might be applied in 2 (two) approaches, namely: 1) concept of supply chain, and ii) concept of partnership or governance. The concept of supply chain is how to meet demand side (MBR) and supply side (developer) while the concept of governance brings together the vision of institutional mission based on partnerships. The first concept should be supported by a long-term financing scheme. While the concept of Good Corporate Governance, Stakeholders or stakeholder procurement, there are 3 (three) parties namely i) State or bureaucrats, ii) Industry or market actors and iii) Community or community. These three stakeholders have a characteristic business process based on their vision and mission Hopefully, the first concepts generate more conducive climate to promote the availability of affordable price in public housing. Strategically, to promote institutional long-term financing system suppoted by the fiscal policies to stimulate both in managing of spending and financing towards more efficiently. In terms of expenditures, the government provides subsidies for down payments and has establihed FLPP (Housing Financing Liquidity Facility) under the Public Service Agency (BLU) mechanism, which serves for primary financing. While the government financing is represented by PT Sarana Multigriya Finansial (SMF) for Secondary financing. The integration of primary and secondary financing needs to be constantly encouraged both from a supply chain approach or a governance or partnership approach.
In the future optimization of funding sources to finance public funding might be implemented as a strategically step to improve the effectiveness of the target based on better criteria based on the home as the basic needs and focus the ownership of the house instead of as an investment portofolio. Long-term fund placement on financial instruments that support housing finance 1) Distribution of housing finance assistance to facilitate the construction of 9,000,000 units of public houses (houses, sukunami (storey apartment), and sewabeli (leasing)); 2) Distribution of housing finance assistance to facilitate the construction of 450,000 households; 3) Expansion of co-operation with the Ministry of Public Service and a related authority to increase the issuance of KPR FLPP; 4) Development of the financing of housing in the best way from the manager and the supplement (credit construction); 5) Development of housing finance assistance for sector-specific MBR; 6) Developing and providing a total of 476,000 units for certain MBR groups; 7) Encourage the formation of specialized MULTIFICINES KPR program; 8) Improvement of technical guidance activities, particularly to Institutions Bank (LKBB) and (Developers); 9) Development of institutionalism that supports housing finance assistance for informal sector in MBR; 10) Development of the guarantee of KPR-FLPP Home self-financing (Swadaya); 11) Facility linkage between the Financial InstitutionBank / Non-Bank (LKB / LKBB); 12) Empowerment of LKB / LKBB. (Financial institution: Banks and Non -Banks. 7.

Attachment-1
Improving role of local government on public housing financing.
1) Enhancement of technical guidance to Provincial Governments, District Government and Provincial Governments; 2) Cooperation with several Metropolitan City and City for preparing the role of Local Housing Services (BLUD) financing housing; 3) Facilitation of the City in identifying the feasible home projects shall be financed by the regional balances; 4) Facilitation of the implementation of BLUD to housing financing in particular the city / regency which having adequate fiscal capacity Source: Ministry of Public Works and Housing Development, 2015.