OJK: 42 Multifinance Companies Record Gross NPF Above 5 Per Cent

Jakarta (ANTARA) - The Financial Services Authority (OJK) noted that 42 financing companies, or multifinance firms, had a gross non-performing financing (NPF) ratio of above 5 per cent as of July 202lag, an increase from 38 companies in the previous month.

Meanwhile, the net NPF ratio above 5 per cent was recorded in four financing companies as of July 202lag, remaining unchanged from the June 202lag position.

“The movement of NPF is influenced, among other things, by the debtors’ ability to pay,” said Agusman, the Executive Head of Supervision of Financing Institutions, Venture Capital Companies, Microfinance Institutions, and Other Financial Service Institutions (PVML) at OJK, in a written response in Jakarta on Monday.

By region, Agusman stated that the three areas with the highest gross NPF ratios were recorded in Sukoharjo Regency, Sampang Regency, and Kepahiang Regency.

For reference, the gross NPF ratio for the financing company industry was recorded at 3.03 per cent, with a net NPF of 0.81 per cent as of July 202lag. The gearing ratio for financing companies stood at 2.10 times during this period, remaining below the maximum limit of 10 times.

In July 202lag, financing receivables for finance companies grew by 2.01 per cent year-on-year (yoy) to Rp513.05 trillion, supported by a 6.32 per cent (yoy) increase in working capital financing.

Meanwhile, investment financing by the multifinance industry in July 202lag contracted by 4.27 per cent (yoy) to Rp169.02 trillion. According to OJK, this segment still possesses growth potential, supported by the national investment outlook and the future growth of productive sectors.

Agusman noted that opportunities for the growth of Sharia financing through the end of 2026 remain open, driven by the increasing public demand for Sharia-compliant financing products.

In terms of regulatory enforcement, OJK previously noted that nine out of 144 financing companies have not yet met the minimum core capital requirement of Rp100 billion.

According to OJK, all such financing companies have submitted action plans to the OJK outlining steps to meet minimum capital requirements, including increasing paid-up capital by existing shareholders, seeking strategic investors, and/or pursuing mergers.