JAKARTA: Vehicle ownership loans in the first-half of this year surged -- beating the growth of other types of loans -- on the back of the robust automotive industry.Bank loans for the automotive segment from January through May reached IDR93.64 trillion, increasing 41.26% from IDR66.29 trillion in the same period last year, according to Bank Indonesia data.House mortgage loans grew 24.71% to IDR149.22 trillion in the first five months of the year. Vehicle ownership and mortgage loans contributed more than 50% of the total loans in the consumer loan segment, which saw an 18.75% rise to IDR604 trillion in the period. Other loans include those used to purchase apartment units and shop-houses.Bank Indonesia has warned about the possibility of a bubble in automotive credit. So, the central bank is considering to issue a loan to value (LTV) rule on automotive loans.LTV is a ratio between the total amount of loan to the total value being financed. For example, in purchasing a car, LTV 10:90 means that the required advance payment is 10% and credit portion from banks or multifinance companies is 90% Mirza Adityaswara, a senior economist at ISEI, said he does not see any indication a bubble on the automotive loans would form, but he agrees that the monetary authority should stand alert on the possibility.Total sales through May has reached 3.41 million motorcycles, increasing 17.59% from 2.9 million. Last year, about 75% motorcycle was bought with credit, according to Indonesian Motorcycle Industry Association's data.While Indonesian Automotive Industry Association (Gaikindo) recorded that through May sales reached 348.939 cars, increasing 16.31% from the year earlier period.Bank Negara Indonesia President Director Gatot M Suwondo said such a bubble would not immediately strike at banks since the financial institutions like BNI disbursed automotive credit through finance companies.If the bubble issue is one concern, go ahead regulate it. We provide financing through channeling parties for automotive, while for mortgage loans we do them ourselves. (t04/msw)

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