Jakarta – The multifinance industry is currently on a difficult road. According to the Infobank Research Bureau, in its 2025 Infobank Rating Study of 130 Multifinance Companies, there are three major challenges facing the industry until the end of 2025.
First, the financing market is under pressure from weakening demand as a result of declining purchasing power. This is indicated by four-wheeled vehicle sales, which plummeted 13.9 percent to 865,723 units in 2024 and are expected to decline further in 2025.
In the first half of 2025, car sales plummeted 8.60 percent to 374,741 units, a 35,279 decrease from 410,020 units in the same period in 2024.
Second, tight liquidity has persisted in recent years due to competition for public funds not only between banking products but also between government-issued Government Securities (SBN) and Bank Indonesia Rupiah Securities (SRBI) issued by Bank Indonesia (BI). The indicator is that bank credit growth has entered a slowdown, slowing from 8.1 percent in May 2025 to just 7.6 percent in June.
Third, the risk of declining financing quality due to decreased or even lost income due to layoffs. This indicator is that the number of layoffs from 2022 to May 2025 is estimated to reach nearly 200,000. The limited job opportunities are evident in the rising unemployment rate.
The wave of layoffs has led to increased unemployment, increased crime, and many people seeking protection from community organizations (CSOs) or non-governmental organizations (NGOs). Tragically, CSOs act like unscrupulous law enforcement agencies, providing shelter for debtors fleeing their responsibility to repay their debts to financing companies and banks.
The Indonesian Finance Companies Association (APPI) acknowledged that many of its members have experienced intimidation from CSOs, particularly when repossessing vehicles belonging to customers or consumers who are behind on their installments.
The Financial Services Authority (OJK) has confirmed it has coordinated with APPI (Indonesian Financial Services Association) to address the financing industry's challenges related to mass organization thuggery.
"We are certainly assisting the association, including coordinating with law enforcement, but we don't want to publicize what we're doing because we don't want our approach to create noise," said Agusman, Chief Executive of the OJK's Supervisory Board for Financing Institutions, Venture Capital Companies, Microfinance Institutions, and Other Financial Services Institutions (PVML), in response to questions from Infobanknews.com (July 22, 2025).
Agusman added that financing companies should consistently conduct comprehensive credit analyses on prospective borrowers and comply with applicable regulations when collecting and executing debts.
"Financing companies must always comply with laws and regulations, norms, and ethics in collecting and executing debts against problematic borrowers," he added.
Amidst market demand pressures and collectability challenges, the quality of financing in the multifinance industry remains strong. According to OJK data, multifinance non-performing financing (NPF) stood at 2.57 percent as of May 2025. This represents an increase compared to the 2.44 percent NPF in May 2024, but a decrease compared to the 2.70 percent NPF in December 2024.
Meanwhile, multifinance industry financing receivables grew limitedly at 2.83 percent, while assets increased by 2.65 percent. This slowdown in the multifinance sector's business growth also slowed financing growth in venture capital financing, infrastructure financing, microfinance institutions, online loans, pawnshops, SMI, SMF, PNM, and Tapera (PVML) to just 4.05 percent, reaching Rp951.89 trillion. Meanwhile, PVML assets, which comprise 744 players, rose 5.74 percent to Rp1,049.15 trillion.
"Around 60 percent of the PVML sector's assets come from the financing industry, which comprises 145 companies. Most multifinance financing is concentrated in the automotive sector, so the decline in motor vehicle sales has also slowed growth in the financing industry," Agusman said.