Executive Summary

Key insights and market outlook

Indonesian Sharia banks recorded significant growth in home financing (KPR) in 2025, with BCA Syariah's KPR iB growing 27.1% to Rp1.5 trillion ¹

² and BJB Syariah's PPR growing 9% to Rp3.5 trillion ³. The growth is attributed to the competitive margin programs and fixed installment certainty offered by Sharia financing products, making them attractive amid rising conventional loan interest rates.

Full Analysis

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Deep Dive Analysis

Sharia Mortgage Financing Continues Strong Growth in Indonesia

Rising Demand Amid Conventional Rate Hikes

Indonesian Sharia banks are experiencing significant growth in home financing (KPR) products during 2025, driven by the competitive advantages of Sharia financing schemes. PT Bank BCA Syariah recorded 27.1% year-on-year growth in KPR iB financing, reaching Rp1.5 trillion by November 2025 ¹

². This growth represents a substantial portion of the bank's consumer financing, with KPR iB contributing 72.9% of total consumer financing ¹.

Competitive Advantage of Sharia Financing

The growth in Sharia home financing is primarily attributed to the competitive margin programs and the certainty of fixed installments throughout the loan period ²

. These features provide financial stability for homeowners, particularly appealing during times when conventional banks are maintaining high interest rates. BCA Syariah's director emphasized that the growing demand indicates continuing public interest in Sharia housing finance ¹.

Industry-Wide Growth Trends

The growth trend is not limited to BCA Syariah. PT Bank BJB Syariah also reported solid 9% year-on-year growth in their PPR (Pembiayaan Pemilikan Rumah) portfolio, reaching Rp3.5 trillion by end-November 2025 ³

. This consistent growth across different Sharia banks indicates a broader industry trend favoring Sharia home financing products.

Market Implications

The strong performance of Sharia home financing products highlights their growing importance in the Indonesian banking sector. As conventional banks maintain higher interest rates, Sharia financing products with their fixed margin structures are becoming increasingly attractive to consumers. This trend suggests a potential long-term shift in consumer preferences toward more stable financial products.

References