OJK: Due To COVID-19, Financing Growth In The Automotive Sector In 2020 Slows Down

JAKARTA - The Financial Services Authority (OJK) projects the growth of multi-finance financing in 2020 is projected to slow down. One of the causes is due to the outbreak of the corona virus or COVID-19.

Head of the OJK 2B IKNB Supervision Department, Bambang W. Budiawan, said the main factor of pressure at multi-finance companies is because the automotive industry, which is being financed, is also sluggish. That is because, COVID-19 has disrupted the production process.

"In 2020, the prospect seems to be slowing down. The first main factor is because the sector being financed, especially the automotive industry, is going down. This year is not expected to increase," he said, at the OJK Office, Lapangan Banteng, Jakarta, Wednesday, March 11.

Bambang revealed, not only has an impact on automotive financing, due to COVID-19, the growth in financing for heavy equipment or construction machinery is also projected to stagnate.

Moreover, said Bambang, since the last two years, the performance of finance companies has indeed faded. "At the end of 2019, the assets of finance companies were only 4 percent or Rp. 518 trillion. Meanwhile, the growth in financing was also in the range of 4 percent to Rp. 452 trillion year on year," he said.

Bambang said that most of the financing was still dominated by multipurpose financing at 51 percent, investment with 30 percent and the rest for working capital.

"In terms of the object of financing, most of the consumptive amounting to Rp317 trillion or 68 percent is motor vehicle financing. Then the investment is around Rp. 124 trillion," he said.

Meanwhile, said Bambang, financing for financing companies also decreased by 2.5 percent or nearly Rp. 9 trillion from the previous year.

Bambang explained that most of the financing for financing companies came from abroad (80 percent) and the rest came from securities and debt of finance companies amounting to 20 percent or IDR 68 trillion.

"For this profit it is quite interesting. The increase is quite high by 13 percent to Rp18.13 trillion, or a growth of Rp2 trillion. In terms of quality, it is still under 2.5 percent, the level of bad credit (NPF) is 2.4 percent," he explained .

OJK assesses that the outbreak of COVID-19 has an impact on the economy and will affect the performance of financial companies. One of them is the performance of finance companies that can be depressed.

Bambang admitted that he had monitored the impact of COVID-19 on financing in the productive sector. According to him, so far the majority of loans provided by finance companies are in the consumptive sector.

"The sectors that are financed if we observe the composition of 72 percent are still consumptive goods, the productive ones are 28 percent to 30 percent," he explained.

According to Bambang, the productive sector is the one most affected by COVID-19. Because, in banking, credit that is carried out is productive credit.