Indonesia's Multifinance Sector Sees Cash Financing Surge Ahead of Year-End Holidays

Seasonal Demand Drives Cash Loan Growth

Indonesia's multifinance industry is experiencing a notable increase in cash financing demand as the country approaches the 2025 year-end holiday season. Industry experts attribute this surge to consumers' heightened need for funds during the Natal dan Tahun Baru (Nataru) period. Bhima Yudhistira, Director of Center of Economic and Law Studies (Celios), noted that the trend of increased cash financing at year-end is seasonal, driven by consumers' requirements for travel and initial year expenses such as home renovations or down payments on vehicles.

Industry Performance and Projections

The trend is expected to continue into 2026, with industry players reporting significant cash financing figures. PT CIMB Niaga Auto Finance (CNAF) recorded Rp1.05 trillion in cash financing in November 2025, contributing 9% to its total portfolio of Rp11.25 trillion. Meanwhile, PT Adira Dinamika Multi Finance Tbk (ADMF) or Adira Finance saw its cash financing (Solusi Dana) rise by about 37% to Rp11.3 trillion by November 2025, representing 29% of its total portfolio.

Maintaining Credit Quality Amid Growth

While the prospects for cash financing remain positive, industry observers caution multifinance companies to remain vigilant in their lending practices. Bhima Yudhistira emphasized the importance of maintaining credit quality rather than solely focusing on loan disbursement numbers. He suggested that companies should be more selective in choosing borrowers based on their credit history or track record.

Risk Mitigation Strategies

To manage risks, Bhima recommended implementing measures such as checking the location of borrowers to avoid areas with high default rates and utilizing technology like psychometric credit scoring to ensure loans are extended to responsible borrowers. Suwandi Wiratno, Chairman of the Indonesian Financing Companies Association (APPI), highlighted that cash financing is driven by various debtor needs, including working capital and emergency funding, which are difficult to predict.

Conclusion

The multifinance sector's cash financing growth presents both opportunities and challenges. As the industry continues to expand, maintaining a balance between growth and risk management will be crucial for sustainable development.