Jakarta, CNBC Indonesia – Finance industry or finance This sector has been heavily affected by the Covid-19 pandemic that has hit Indonesia and globally since March last year. The Covid-19 pandemic is expected to continue to put pressure on finance companies this year.
Last year, data from the Financial Services Authority (OJK) recorded that receivables from finance companies contracted by -17.1% yoy (year on year) from the previous year growing 3.7%, due to the lack of recovery in various economic sectors.
According to the Chairman of the OJK Board of Commissioners, Wimboh Santoso, this year’s financing receivables will still contract by -1% to -5%. The correction was caused by the condition of the national economy which had not yet recovered due to the pandemic.
What’s more, the government has also implemented an Emergency Micro PPKM policy to control the spread of the corona virus, starting from July 3 to July 20 in Java-Bali.
“Financing receivables are expected to continue to contract at the level of -1% to -5% (yoy), especially due to the rise of purchases of motorized vehicles in cash,” said Wimboh, in his presentation at a webinar entitled “Economic Outlook on Post-Stimulus and Vaccination Economic Prospects, Tuesday (6/7/2021), last Tuesday (6/7/2021).
Multifinance Close
Previously, OJK data also revealed facts related to the number of finance companies that closed their books, including bankruptcy and returning permits to the OJK.
Leasing or finance indeed become one of the Non-Bank Financial Industry (INKB) in addition to insurance, investment industry (mutual funds), and pension funds.
By definition, business finance has four business lines, namely consumer financing, leasing, factoring and credit cards. But the general term in the market today recognizes the word “leasing” as another name for a finance company that provides credit for the purchase of cars, motorcycles and electronic products.
Referring to the IKNB Statistics data published by the OJK until April 2021, the number of financing company actors is currently reduced by 12 companies to 171 players, from the April 2020 period.
The details, as many as 166 conventional finance companies and 5 sharia finance companies with total assets reaching Rp 437.92 trillion.
In the same period in the previous year, there were 183 actors in the finance company sector, with details, 178 from conventional finance companies and 5 sharia multifinance companies or did not change with total assets reaching Rp 521.73 trillion.
In response to this, the Vice Chairman of the Executive Board of PT Indomobil Finance Indonesia, Gunawan Effendi assessed, the closure of a number of companies leasing This is because there are several factors.
According to him, one of the factors is related to the inability of the related multi-finance companies in terms of minimum equity obligations of IDR 100 billion in accordance with the provisions of OJK Regulation No.
“Financial companies that close of course have their own considerations and reasons. OJK as the supervisor of the financing industry will certainly see how the finance company can meet the requirements and comply with the applicable POJK,” he told CNBC Indonesia.
Separately, the Chairperson of the Indonesian Financial Services Association (APPI), Suwandi Wiratno Siahaan previously stated that the Covid-19 pandemic had a significant impact on the financing business.
This is reflected in the increasing ratio of non-performing financing (NPF) of financing companies.
However, with the restructuring policy being implemented, the NPF slowly began to show an improvement from the December position of 4.01% and is currently at the level of 3.7%.
In addition, said Suwandi, the PPnBM discount policy (sales tax on luxury goods) is believed to increase multi-finance receivables.
“With the entry of new financing volumes with new qualities, I hope the NPF will drop to 3% in the next few months,” said Suwandi.
Wimboh further said that there are still prospects in the financing business. He believes that in the future, interest in purchasing motorized vehicles on credit will continue to grow in line with the needs of the millennial generation who have sufficient savings to buy motor vehicles.
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