BI Rate Hike: OJK Warns Multifinance Companies to Strengthen Credit Mitigation

Jakarta, VIVA – The Financial Services Authority (OJK) has issued a warning to financing companies, particularly those in the multifinance sector, to strengthen their credit risk mitigation measures. This follows the Bank Indonesia (BI-Rate) increase of 50 basis points (bps) to 5.25 per cent last May.

Agusman, the Executive Head of Supervision for Financing Institutions, Venture Capital Companies, Microfinance Institutions, and Other Financial Service Institutions at OJK, stated that the BI-Rate hike has the potential to affect debtors’ ability to repay loans. This is particularly relevant for financing schemes using floating rates, which could ultimately impact non-performing loan (NPL) levels.

“Therefore, multifinance companies need to take the necessary risk mitigation steps,” he said in a written response received in Jakarta on Monday, 8 June 2026.

According to Agusman, to maintain financing quality, multifinance companies must strengthen debtor feasibility analyses, conduct intensive portfolio monitoring, and implement adequate risk mitigation strategies.

Agusman also noted that the BI-Rate hike could potentially affect the issuance of corporate bonds by multifinance companies, as it may increase the cost of funds, prompting these companies to be more cautious regarding bond issuances.

“In response to these conditions, multifinance companies need to strengthen interest rate risk management, including through the diversification of funding sources and enhancing funding efficiency,” he added.

As of April 2026, funding sources for the multifinance industry were still dominated by the banking sector, valued at Rp282.06 trillion, or 74.52 per cent of the industry’s total funding.

Meanwhile, the distribution of financing in the multifinance industry was largely spread across three economic sectors: wholesale and retail trade at Rp90.69 trillion (16.67 per cent of total financing receivables), leasing activities at Rp57.76 trillion (10.61 per cent), and the manufacturing industry at Rp53.70 trillion (9.87 per cent).

Nevertheless, the highest growth in financing receivables was recorded in the household sector at 28.16 per cent year-on-year. “This growth is driven by the continued high demand from the public for various consumption and multipurpose financing needs,” said Agusman.