Market Report, "Consumer Lending in Indonesia", published


New Financial Services market report from Euromonitor International: "Consumer Lending in Indonesia"


[USPRwire, Wed Nov 18 2015] Consumer lending maintains growth in 2015

Given the Indonesian economy faced various ongoing challenges, in 2015 consumer lending grew at a more-moderate rate compared with previous years. Major banks and multi-finance companies revised their expected lending growth for the year to lower rates than previously forecasted, as the economy was set to only improve a little by the end of 2015. Even so, in line with the economic improvement, the second half of the year was stronger for consumer lending than the first half, especially during the Eid festival when most consumers extended their purchasing power through the 13th month salary, as well as leveraged consumer credit to purchase items to celebrate the festive season.

Full Report Details at
- http://www.fastmr.com/prod/1072645_consumer_lending_indonesia.aspx?afid=302

Short-term lending performs better than long-term lending

Long-term financing such as mortgages/housing and auto lending are the worst-affected by the slower performance of the economy as the longer the loan duration, the higher the uncertainty or risk for both lenders and consumers. Most lenders are tightening their credit assessment requirements due to a higher percentage of non-performing loans, thus limiting the number of approved loans. While long-term consumer lending posted single-digit growth in gross lending terms during 2015, short-term lending, on the other hand, still recorded double-digit growth (significantly stronger than the long-term growth rates). Weakening purchasing power among consumers, due to high inflation and rising prices, has had a positive effect on short-term loans as consumers have extended their purchasing power through them (both card and non-card consumer credit), whereas it has had a negative impact on long-term loans.

The percentage of non-performing loans slightly increases

Most banks and multi-finance companies have managed to curb the rising percentage of non-performing loans through increasing their credit quality. For this reason, non-performing loans only posted a slight percentage increase in 2015 from the previous year, despite consumers’ spending power being greatly reduced by soaring prices and the strengthening US dollar. There has been a significant rise in non-performing loans among lower-income groups compared with middle-upper-income groups, as the former are the worst-affected by prices rises of basic goods such as fuel, food and utilities.

Multi-finance companies broaden their portfolios

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