State-owned insurance firm PT Jamsostek said it would provide some Rp 5 trillion (US$526 million) in housing loans this year for workers under its insurance scheme program.

The loans, to be provided at affordable interest rates, will be used to finance the purchase of 200,000 modest houses and apartments.

"We expect the loans to not only benefit the workers but also the real sector, as it will help drive construction work," said company president Iwan Pontjowinoto during the launching ceremony of the program on Wednesday, which was witnessed by Vice President Jusuf Kalla.

He explained that the loans would help accelerate the government's plan to provide one million modest houses and apartments by 2009, which until now has not been seriously implemented.

Workers eligible to apply for the loans are those who have participated in the Jamsostek insurance program for at least five years, and have received approval from their respective companies.

The participants should also be below 40 years of age and have a minimum monthly income of Rp 2 million. The maximum loan will be Rp 75 million for each participant, with a minimum 15-year installment period.

Of the country's 90 million-strong work force, 26 million are registered with Jamsostek, and only 7.9 million pay their monthly insurance premiums to the firm, according to Iwan.

Jamsostek reaped some Rp 5 trillion last year from the monthly premium paid by the active members.

During the ceremony, Jamsostek signed a memorandum of understanding (MOU) with Bank Negara Indonesia (BNI), Bank Tabungan Negara (BTN) and Bank Rakyat Indonesia (BRI) to provide the housing loans.

"Jamsostek will act as a provider for the loans, which will later be disbursed by several state banks," said Iwan, adding that the cooperation with the banks would be under a revenue-sharing scheme.

The company also inked another MOU with the Indonesian Housing and Residential Developers Association (Apersi) and the Indonesian Real Estate Developers Association (REI) for the construction of the houses. Developers interested in building the houses or apartments should be a member of these associations.

Jamsostek manages around Rp 34.2 trillion in workers funds currently, with around 50 percent of the funds invested in bonds, 30 percent in bank deposits and 10 percent in mutual funds and non-moving assets, and the remaining 10 percent in equities.

With such a huge amount of funds under its management, Jamsostek is the only local institutional investor that is capable of acting as a key mover of the stock market, with most other movers being foreign-based investment banks and securities houses.