Sumber: Istimewa
THE 2026 Eid al-Adha celebrations will be less busy than in previous years. Many sacrificial animal traders are complaining of a lack of customers. Sales of sacrificial animals are expected to decline by tens of thousands of cows and goats. This situation continues the decline seen during the Eid al-Fitr celebrations last March. The Ministry of Transportation recorded 147.5 million people returning home for Eid al-Fitr in 2026, the number is lower compared to the numbers in previous years, such as 154 million in 2025 and 242 million in 2024.
Another indicator is the prevalence of motorcycles without license plates on the roads. These are debtors of financing companies who are behind on their installments and trying to evade officers or debt collectors. Loss of income, whether due to layoffs or the bankruptcy of micro, small, and medium enterprises (MSMEs), has diminished their ability to repay their debts.
The MSME sector, which is usually resilient in the face of economic pressures, is experiencing greater pressure than large businesses. This is evident in data on bank credit developments over the past few years. According to Infobank Research Bureau (birI), in 2026, MSME lending by commercial banks only grew 3.37%, while total commercial bank lending increased 9.76%. In addition to weak demand, banks are becoming more cautious in disbursing credit to the MSME sector, which faces rising MSME liquidity and risk indexes.
To seek financing, MSMEs are turning to multifinance companies with more lenient, flexible, and faster repayment terms. Consequently, working capital financing receivables grew 10.06% in 2025, while total multifinance financing receivables only increased slightly by 0.61%. Unfortunately, investment financing receivables contracted by 2.35%. Similarly, multipurpose financing receivables by the multifinance industry fell 0.34% in line with the decline in automotive sales. Automotive sales have continued to decline since 2023, declining by 7.2% throughout 2025 to 803,687 units.
Car sales have seen a brief resurgence this year. Cumulatively, car wholesale sales from January to April 2026 reached 289,787 units, a 12.5% increase compared to 257,647 units in the same period the previous year. Unfortunately, the growth was not driven by consumer purchasing power. 80% of car purchases are currently made on credit, while multi-purpose financing by the multifinance industry grew only 1.32% as of March 2026.
The increase in automotive sales is driven primarily by supporting national logistics operations and major government projects, such as the Free Nutritious Meals (MBG), the Red and White Village Cooperative (KDMP), and the creation of large-scale rice fields and plantations (food estates), as is being done in Papua.
The multifinance industry is also on an uphill climb. The Financial Services Authority’s (OJK) goal of driving this industry to grow by 6% to 8% will not be easy to achieve. The threat of inflation, rising funding costs, declining purchasing power, and acts of thuggery that hinder collection could degrade the quality of the financing industry’s assets. According to discussions held by Infobank Institute with several financing business players, several challenges currently face the multifinance industry.
The first challenge is the pressure of climate change. Energy transition policies, deforestation, and sustainability demands have increased financing risks in the agribusiness (palm oil) and mining sectors, as financed vehicles or heavy equipment assets could cease operations due to the revocation of environmental permits.
The second challenge is the weakening rupiah exchange rate. Many multifinance companies have foreign currency debt (bank loans or global bonds). According to data from The Financial Services Authority (OJK), foreign funding will reach Rp 97.49 trillion by 2025. The depreciation of the rupiah exchange rate will increase the burden of principal and interest payments on debt, while rupiah-denominated financing income will stagnate. In 2025, receivables from 145 multifinance companies will only increase by 0.61% to Rp 506.50 trillion, and their profits will plummet by 18.07% to Rp 18.45 trillion.
The third challenge is the risk of rising interest rates from an increase in Bank Indonesia’s benchmark interest rate (BI rate). To strengthen the rupiah, BI raised the benchmark interest rate by 50 basis points to 5.25% last May. Although this may not be enough to halt the weakening of Indonesian assets, analysts predict that BI will raise the BI rate again. This will increase the cost of funds.
This means that market liquidity will become tighter, and in recent years, competition for public funds has intensified not only between banking products but also between Government Securities (SBN) issued by the government and Bank Indonesia Rupiah Securities (SRBI) issued by Bank Indonesia (BI).
The fourth challenge is the one-stop-shop policy for commodity exports. President Prabowo established PT Danantara Sumberdaya Indonesia (DSI), which will operate in stages starting June 1, 2026. This policy has received a negative response from the market, driving down the share prices of commodity issuers. Although currently focused on palm oil and coal, the market believes a similar scheme could be expanded to other commodities such as nickel, copper, bauxite, tin, and even liquefied natural gas (LNG).
To date, the practice of underinvoicing commodity exports has occurred due to a lack of oversight, while mining companies have also had to pay hidden costs. Therefore, the practice of under-invoicing, which deprives the state of revenue, is not solely a private sector problem but also a result of corrupt behaviour within government officials.
Monopolizing commodity exports means private companies lack the flexibility to deal with commodity price fluctuations. When prices fall, margins can be eroded, and if a decline occurs, businesses will reduce their business activities, reducing the use of heavy equipment and squeezing their ability to repay loans to multifinance companies.
The fifth challenge is weakening purchasing power due to inflation and limited employment opportunities. The wave of layoffs in Indonesia is predicted to continue. According to data from the Ministry of Manpower, layoffs have increased from 25,114 people in 2022, 64,855 people in 2023, 77,965 people in 2024, and 88,519 people in 2025. Throughout the first four months of 2026, the number of layoffs reached 15,425 people, and several labour associations say the figure is much higher.
According to the Statistics Indonesia (BPS), the number of informal workers continues to increase from 78.14 million in 2021, 81.33 million in 2022, 83.34 million in 2023, 84.13 million in 2024, and 86.58 million in 2025. This represents 59.40% of the total population employed in the informal sector
The sixth challenge is the rise in thuggery by individuals from community organizations (ormas) and non-governmental organizations (NGOs). Their membership numbers have increased along with the wave of layoffs, which has led to rising unemployment and the growth of these organizations. Official government data indicates that as of July 2025, there were 618,009 legally registered mass organizations. These comprised 239,311 associations and 378,698 foundations. Furthermore, 998 mass organizations held a Certificate of Establishment (SKT) from the Ministry of Home Affairs and 44 foreign organizations registered with the Ministry of Foreign Affairs. Tragically, some mass organizations act as shady law enforcement agencies, providing shelter for debtors fleeing their responsibilities to finance companies and banks.
Thuggery under the guise of mass organizations has also forced debt collectors (DCs) to retreat. This is because delinquent debtors resort to thugs, daring to confront field officers and slow down the collateral execution process. Debtors even resort to taking cases to the criminal or human rights courts.
The seventh challenge is the legal infrastructure is not supportive of the multifinance industry. The process of auctioning or seizing collateral through the courts can be extremely slow, sometimes even years long. Furthermore, judges’ decisions often favour debtors as “weak parties,” even when there is clear default. Execution in the field is often obstructed by village officials or local police.
The lack of legal certainty has also led to the widespread practice of buying and selling motor vehicles using only a Vehicle Registration Certificate (STNK). This practice has the potential to increase the ratio of non-performing financing (NPF) and disrupt stability in the financial sector. Not only multifinance companies, but also banks and insurance companies will be affected. Bad financing will spread to banks, and multifinance companies increased risk costs.
Therefore, the government, through the Ministry of Communication and Digital and the police, must take firm action against social media accounts advertising this illegal practice. Buyers can be charged under Article 480 of the Criminal Code concerning receiving bribes, while sellers can be charged under Article 36 of the Fiduciary Guarantee Law.
Due to these challenges, The Financial Services Authority (OJK), as the supervisory authority, continues to monitor the resilience of the multifinance industry, as stated by Agusman, Chief Executive of the OJK Supervisory Board for Financing Institutions, Venture Capital Companies, Microfinance Institutions, and Other Financial Services Institutions. “We emphasize the importance of mitigating market risk, especially for those with foreign currency funding exposure, including by requiring them to implement full hedging policies in a disciplined manner,” he told Infobank in May. (See: The Cushion of Exchange Rate Pressures and Liquidity)
Given the complex challenges faced, multifinance companies have no choice but to strengthen their positions and resist the temptation to take shortcuts to achieve high growth by targeting high-risk segments or products. Investors are also questioning the country’s fundamental economic conditions, particularly fiscal sustainability, burdened by debt repayments and the massive budgets of government political programs such as the Free Nutritional Meals (MBG) program and the Red and White Village Cooperatives (KDMP).
The question is: Will Indonesia’s economic fundamentals and fiscal resilience be strong if the rupiah continues to plummet past Rp 18,000 per US dollar, let alone Rp 20,000 per US dollar? Indonesia’s economy can be built strong through the eloquent speeches of a leader. In fact, the numbers speak louder than President Prabowo Subianto’s speeches. From the beginning of 2026 to May 26, 2026, the Jakarta Composite Index (JCI) plummeted from 8,748.13 to 6,130.29. Similarly, the rupiah exchange rate plummeted against many other currencies.
Below is the interview regarding the case with Agusman, Chief Executive of The Financial Services Authority (OJK), Supervisory Agency for Financing Institutions, Venture Capital Companies, Microfinance Institutions, and Other Financial Services Institutions.
Another indicator is the prevalence of motorcycles without license plates on the roads. These are debtors of financing companies who are behind on their installments and trying to evade officers or debt collectors. Loss of income, whether due to layoffs or the bankruptcy of micro, small, and medium enterprises (MSMEs), has diminished their ability to repay their debts.
