OJK: Financing Distribution For Paylater Companies Increases 33.64 Percent As Of May 2024

JAKARTA - The Financial Services Authority (OJK) said that the value of the distribution of finance companies (PP) to buy now pay later or buy now pay later (BNPL/paylater) increased 33.64 percent yoy to Rp6.81 trillion as of May 2024.

"The total distribution of PP BNPL financing receivables as of May 2024 increased 33.64 percent yoy to Rp6.81 trillion," said OJK Chief Executive Supervisory of Financing Institutions, Ventura Capital Companies, Micro Financial Institutions, and Other Financial Services Institutions (PVML) Agusman in his statement, quoted from Antara, Saturday, July 15.

He also assessed that paylater financing in Indonesia has considerable market potential in line with digital-based economic developments.

The quite good prospects, he continued, can also be seen from the gross Non-Perfoming Financing (NPF) ratio and the BNPL net NPF, which were recorded at 3.22 percent and 0.84 percent, respectively.

Agusman said he was reviewing the rules related to paylaters. Several things that are still under discussion include the requirements of finance companies that organize paylater activities, ownership of information systems, and protection of personal data.

He stated that other things that are also still in the process of being studied, namely audit track records, security systems, access and use of personal data, cooperation with other parties, and risk management.

Not only paylater financing, his party noted that the development of Islamic financing in May 2024 was also quite good.

"As of May 2024, the outstanding value of Islamic financing increased 27.49 percent yoy to Rp26.5 trillion," said Agusman.

He said that the value of problematic sharia financing was still under control with a gross NPF ratio of 1.9 percent and net NPF of 0.62 percent.

His party is also committed to continuing to increase Islamic financial literacy and encouraging Islamic finance companies to expand sharia financing products through innovation and product diversification to develop the financing sector.

Meanwhile, regarding motor vehicle financing receivables, Agusman stated that the sector financing increased 12.62 percent yoy to IDR 400.57 trillion as of May 2024.

He considered that this showed that the distribution of financing was still growing positively amid the decline in sales of motorized vehicles.

"By looking at the trend of distributing motor vehicle financing, it is projected that vehicle financing will still have the opportunity to grow with a value of 9-11 percent by the end of 2024," he added.