Wednesday, 23 April 2014


The Association of Indonesian Financing Agencies predicted downturn of business value during election in 2014 compared to 2009. Financing agencies especially serving two-wheel or three-wheel automotive were dependent on other industry lines. “In the election year of 2009 only around 5% to 10%. Meaning downturn by half although both years were elections years,” Chairman of APPI Suwandi Wiratno disclosed to Business News [4/4].

Financing agencies service included credit card, business rentals etc. Financing agency business was closely related to manufacturing, distribution, single brand holder etc. “as other industry lines were having downturn.

In Indonesia sales of 2-wheel vehicles was responsive to launching of new brands, which normally offered new innovative products. Indonesian consumers tend to prefer new brands. “Probably in 3 to 5 years consumers preferred to buy new products, not just motorcycles but also motorcars. They would give old vehicles to relatives and they would buy a new car through financing agencies.”

Although business was down, the figure was not significant. It could be temporary and APPI remained optimistic about multi-finance business. Today multi-finance business was also related to various financial institutions. The relationship strengthened, especially in the banking sector.

Bank Mandiri resources had it that multi-finance companies had 78% of fund from banks. Multi finance was also entwined with insuring of credit guarantee, so insurance companies were also entwined with multi-finance, while multi-finance had financing resources from the capital market. Besides, institutions like cooperative societies, life insurance, pension plan, underwriters, investment managers etc were inter related in multi-finance business.

“In credit services for four-wheel vehicles came Hino and Nissan. Financing agencies must be members first. Toyota had Astra Finance; but not all credit for Toyota products are financed by Astra Finance. A big company like Toyota has diversed linkages. Many multi-finance agencies are financing Toyota, it all depended on business relationship; the agencies were in the respective dealers. BII Finance for example, was not only serving companies of their own group, it is a form of Kartel practices. They can be reported to the Commission for Business Relationship [KPPU].” (SS)   

Business New - April 11, 2014

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