Examining Key Performance Challenges in Indonesia's Financing Industry as Debt Collection Practices Come Under Scrutiny

Multiple significant challenges are currently affecting the performance of Indonesia’s financing industry. These range from capital adequacy requirements, the conclusion of credit restructuring programmes, rising non-performing financing (NPF) ratios, to slower financing growth.

Separately, the issue of debt collection practices by debt collection agencies has also drawn public scrutiny. The role of debt collectors has become a contentious matter due to various incidents in the field, which inevitably affect the overall image of the financing industry and place pressure on financing companies’ performance.

Friction with the public and uncooperative parties frequently generates conflict. However, such issues should be addressed through strengthening regulation and supervision rather than eliminating debt collection activities, which form part of the financing industry’s ecosystem for maintaining credit quality.

Recent OJK data indicates that whilst the industry’s NPF ratio remains relatively controlled at 2.51% (gross), the nominal value of non-performing financing remains significant.

Maman Firmansyah, head of the OJK’s Directorate for Supervision of Financing Institutions and Venture Capital Companies, stated that throughout the year financing companies wrote off Rp28.32 trillion, with additional provisions (CKPN) of approximately Rp30.20 trillion. He emphasised that write-offs do not mean debtors’ obligations disappear, but rather represent an accounting mechanism to prevent financial statements from becoming overburdened whilst collection efforts continue.

“So the Rp28 trillion that was written off, the financing companies still continue to pursue collection. In SLIK [the Credit Information System] it will still be recorded as Category 5,” he stated at a Warta Ekonomi seminar titled ‘Unravelling the High Complexity of Non-Performing Credit and Collection Challenges,’ on Saturday, 28 February 2026.

With total active automotive financing contracts reaching 13 million, the potential for friction during collection processes becomes difficult to avoid. “Total automotive contracts we have amount to 13 million. So if 1% of 13 million already means 130,000 problematic accounts, collection efforts will be pursued,” he added.

In the same forum, Gusti Wira Susanto, board member of the Association of Indonesia’s Financing Companies (APPI), emphasised that collection issues cannot be separated from the history and legal structure of the financing industry itself.

Since Law No. 42 of 1999 on Fiduciary Guarantees was enacted, the financing pattern changed significantly, with vehicle ownership remaining in the debtor’s hands whilst financing companies hold security rights such as vehicle registration documents.