KONTAN.CO.ID - JAKARTA. The performance of the financing industry continues to face pressure. The Financial Services Authority (OJK) noted that the Return on Asset (ROA) of the multifinance sector decreased to 4.94% in the first quarter of 2025. This figure has decreased compared to the position in March 2024 which was still at the level of 5.57%.

Practitioner and observer of the financing industry, Jodjana Jody, assessed that this decline in performance was inseparable from the various challenges that loom over the industry. He said that this year is not an easy period for multifinance players to grow, especially amidst economic conditions that are still full of uncertainty.

"Credit risk has increased due to the deterioration in people's purchasing power. Geopolitical pressures have also created uncertainty that makes the business world tend to be careful," he told Kontan, Monday (30/6).

Jody added that the increasing wave of layoffs has also worsened credit quality, as reflected in the worsening ratio of non-performing loans (NPF) compared to early 2024.

This condition has encouraged multifinance companies to tighten financing distribution. According to Jody, almost all players are now implementing stricter risk protocols, as well as screening prospective debtors with safer risk profiles.

He also reminded of the importance of portfolio diversification so as not to rely too much on automotive financing, which is under pressure this year.

"The automotive market was recorded to have fallen 9.2% year-on-year (YoY) as of May 2025. High dependence on this sector could be an additional risk," he said.

With these conditions, multifinance industry players need to be adaptive in maintaining credit growth while managing risk to remain competitive amid economic pressures.