Indonesia's Multifinance Sector Shows Profit Growth Amid Challenging Market

Industry Profit Reaches Rp16.14 Trillion

The Indonesian multifinance industry has reported a significant profit of Rp16.14 trillion as of September 2025, marking a 10.54% month-on-month increase. This growth is primarily attributed to improved credit quality and better internal efficiency measures implemented by multifinance companies.

Credit Quality Improvement Drives Profitability

Industry players have successfully maintained lower non-performing finance (NPF) ratios through stricter credit assessments and more prudent lending practices. The improvement in NPF has led to reduced provisioning requirements, thereby positively impacting profitability.

Shift in Business Focus

Many multifinance companies are shifting their focus from vehicle financing to cash loans and working capital financing. This strategic move is in response to the current sluggish automotive market conditions. By diversifying their product offerings, these companies aim to maintain growth momentum.

Company Performance

Major players in the industry have shown varying performances. PT Adira Dinamika Multi Finance Tbk (ADMF) reported a sequential improvement in quarterly performance despite an overall decline in year-on-year profit. The company's CFO, Sylvanus Gani, highlighted that Adira Finance has been focusing on operational efficiency and portfolio quality enhancement.

Meanwhile, PT Astra Sedaya Finance (Astra Credit Companies/ACC) recorded a 4% year-on-year profit growth, driven by improved portfolio performance and prudent risk management. ACC remains optimistic about maintaining positive growth until the end of 2025.

Outlook

While the profit growth is a positive sign, industry experts caution that it should not be interpreted as a direct indicator of economic recovery. The improvement is largely due to internal measures taken by multifinance companies rather than increased consumer spending. Continued focus on credit quality, operational efficiency, and digitalization will be crucial for sustaining profitability in the challenging market environment.