Banking and Finance

Consumer Credit to Fall by 25.9%

VIVAnews - Indonesian Financial Services Association (APPI) predicts that the total consumer funding that will be disbursed by 2009 will amount to Rp 100 trillion (US$9.14 billion), or a decrease of 25.9 percent compared to 2008's figure of Rp 135 trillion (US$12.34 billion).
 
According to APPI Head Wiwie Kurnia, this decrease is caused by the falling demand caused by the global financial crisis. The projection includes fuel price decline and a country economic growth of between 5 and 5.5 percent.
 
"2009 is a year of challenges and chances for us because, amidst plunging funding, there will still be growth," Kurnia said on Tuesday, Dec 23.
 
The financing composition includes consumer funding by Rp 63.5 trillion (US$5.8 billion), leasing by Rp 34 trillion (US$3.1 billion), credit cards by Rp 1 trillion (US$91.35 million), and factoring by Rp 1.5 trillion (US$137.2 million).
 
With regard to financed products, 42 percent of the funding will be utilized for financing motorcycles; 42 percent for financing cars; 10 percent for financing heavy machineries; and the remaining six percent for financing electronics and credit cards.
 
"There is high consumer funding. However, demands are projected to decrease by 30 percent. There will be downturn on demands of vehicles and heavy machineries," Kurnia said.

Total assets of financing companies are estimated to reach Rp 120 trillion (US$10.98 billion) and non-performing loans percentage is under three percent.
 
To push the non-performing loans, the companies will examine whether or not their existing consumers are able to repay. 

Kurnia also said that BI Rate cut will not be followed by decrease of banks' interest rate due to tight liquidity. It will cause banks' interests to rise because financing companies have put up with high interests.
 
"Issuing bonds amidst banks' high interest rates is unattractive. It is also difficult to propose loans from foreign banks," Kurnia stated.

Legislator Soroti Daya Beli Gen Z di Jakarta, Bisa Berkontribusi Besar Kendalikan Inflasi

Translated by: Bonardo Maulana Wahono

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VIVA.co.id
29 Maret 2024