Gross non-performing financing (NPF) of finance companies was observed at 2.75% as of July 2024, up from 2.69% in July 2023. Economist and Director of Digital Economy at the Center of Economic and Law Studies (Celios) Nailul Huda commented on the increase in bad debts of multifinance companies.
Huda said, on an annual basis, this year is worse than last year. although compared to May 2024, the performance in July 2024 was slightly better. As of June 2024, gross NPF of finance companies reached 2.80%.
On an annual basis, there has been a weakening of purchasing power and layoffs in various industries. As of August 2024, 46,000 people have been laid off. The layoffs have reduced labor income and weakened employees' purchasing power.
Huda also said that employees who usually get a regular salary per month are unable to pay installments, including multifinance financing installments. This can lead to an increase in defaults on an annual basis. Therefore, Huda said the multifinance industry must be quite careful in lending in the future, especially for Buy Now Pay Later (BNPL). With fairly loose credit scoring, the potential for default is also quite high.
Source : finansial.bisnis.com
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