APPI Urges Financing Companies To Diversify Funding So That They Don't Always Depend On Banking Loans

JAKARTA - Chairman of the Association of Indonesian Financing Companies (APPI) Suwandi Wiratno appealed to finance companies to diversify funding sources so that they do not depend on loans from the banking sector.

"The financing company in Indonesia still has great potential to improve growth performance with a growing and advanced business model," said Suwandi Wiratno in a statement, quoted from Antara, Monday, July 15.

In order to carry out this diversification, he said that finance companies also need to develop sustainable finance and sharia products, according to the Roadmap (Roadmap) for the Development and Strengthening of Financing Companies 2024-2028 which was launched by the Financial Services Authority (OJK) in March.

In addition, he continued, financing companies affiliated with banks can increase their funding sources through the joint financing program.

Meanwhile, for companies that are not affiliated with banking, Suwandi said that increased funding could be carried out through the issuance of bonds, additional paid-up capital, loans from government institutions, and asset securitization.

He considered that the various development efforts needed to be carried out because the development of financing companies in Indonesia was far behind compared to Japan.

According to him, the business model of finance companies in Indonesia was still like a finance company in Japan in the 1970s.

Even so, Suwandi believes that financing companies in Indonesia still have a lot of potential to develop more advancedly.

He also appealed to financing companies in Indonesia to continue to innovate according to the needs of the community.

"Financing companies in Indonesia still have great potential to improve growth performance with a growing and advanced business model," he added.