Multifinance industry sees brighter prospects<\/p>\n
P.C. Naommy, The Jakarta Post, Jakarta<\/p>\n
The Indonesian Financial Services Association (APPI) projected
\nnet investment by the country's multifinance industry this year
\nto grow by 20 percent to Rp 60 trillion (US$7.14 billion) from
\naround Rp 50 trillion last year despite rising political tension
\nrunup to the general and presidential elections.<\/p>\n
The APPI said that the current declining trend in domestic
\ninterest rates would have a positive impact on its members.<\/p>\n
\"I am optimistic that the decline in interest rates will have
\na positive effect on the multifinance industry since industrial
\nplayers will see it as a good opporunity to make new
\ninvestments,\" said Hosea, the secretary-general of APPI, during a
\nmeeting with the press on Thursday.<\/p>\n
As the umbrella organization for about 102 multifinance
\ncompanies with core businesses in leasing, factoring, consumer
\nfinance and credit cards, the association plays an important role
\nin improving capital flows and helping accelerate the country's
\neconomic recovery.<\/p>\n
\"We have maintained this business for a long time, we have the
\nexperience and we have qualified people to manage the business,\"
\nsaid Hosea.<\/p>\n
He also said that in addition to collaborating with banks, the
\nmultifinance industry would also issue new bonds to finance its
\nlending activities.<\/p>\n
Last year, multifinance companies issued around Rp 14 trillion
\nworth of bonds. The value of the bonds to be issued this year
\nwould be about the same.<\/p>\n
According to Hosea, the APPI has noticed paradigm shifts in
\nthe workings of the multifinance industry as between the period
\nbefore and after the period after the late 1990s economic crisis.<\/p>\n
\"Before the crisis, most of the multifinance companies made
\nmistakes in their practices,\" said Hosea, adding that during that
\ntime most of the multifinance companies would borrow money from
\nbanks before they even had clients seeking loans.<\/p>\n
According to Hosea, the former practices had adverse
\nconsequences as many of the multifinance companies became saddled
\nby enormous debts.<\/p>\n
The paradigm started to change after the crisis, when the
\ncompanies identified their potential clients first before
\nborrowing the funds. \"This allows us to better control the flow
\nof money,\" said Hosea.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/multifinance-industry-sees-brighter-prospects-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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