Papua Selatan Sees Significant Growth in Financing Receivables

Driven by Heavy Equipment Financing

The Financial Services Authority (OJK) has reported a substantial increase in financing receivables in Papua Selatan province. As of September 2025, the growth stood at 126.49% year-on-year, reaching a total of Rp696.54 billion. Agusman, Head of Executive Supervisor for Financing Institutions at OJK, attributed this surge primarily to the increased financing for heavy equipment, which amounted to Rp351.58 billion.

Positive Outlook for Heavy Equipment Financing

The OJK remains optimistic that the positive trend in heavy equipment financing will continue through the end of 2025. This optimism is supported by the overall growth in heavy equipment financing across the multifinance industry, which saw a 9.38% year-on-year increase to Rp48.24 trillion in the third quarter of 2025. Agusman noted that despite various challenges, such as commodity price pressures, the industry is expected to maintain its positive trajectory.

Multifinance Industry Performance

The multifinance industry as a whole demonstrated resilience, with total financing receivables reaching Rp507.14 trillion in the third quarter of 2025, representing a 1.07% year-on-year growth. The industry's risk profile remained healthy, with a gross non-performing financing (NPF) ratio of 2.47% and a net NPF ratio of 0.84% as of September 2025. Additionally, the gearing ratio stood at 2.17 times, well below the maximum allowed limit of 10 times.

Future Projections and Recommendations

Looking ahead to 2026, the OJK is cautiously optimistic about the continued growth of the multifinance industry, driven by potential expansion opportunities. To navigate future challenges, the OJK has advised financing companies to strengthen their risk management practices, diversify their product offerings, and accelerate technological transformation.