PT Indodana Multi Finance (Indodana Finance) is implementing proactive strategies to maintain credit quality and reduce defaults in its Buy Now, Pay Later (BNPL) services. Indodana Finance Director Iwan Dewanto stated to Kontan on Saturday (March 29) that the company applies a selective and prudent credit scoring system while strengthening its risk management framework.

The company has also adopted stricter data-driven credit analysis and comprehensive risk control measures. Additionally, Indodana Finance focuses on educating users to encourage responsible financial behavior when utilizing BNPL services.

Enhancing Payment Reminders and Merchant Partnerships

To further minimize default risks, Indodana Finance is expanding its partnerships with trusted merchants. The company has also introduced automated payment reminders to help users manage their installments more effectively.

"With these measures, we are confident that we can keep our Non-Performing Financing (NPF) ratio under control while ensuring sustainable and healthy business growth," Iwan told Kontan.

Maintaining a Low Non-Performing Financing Ratio

Iwan emphasized to Kontan that Indodana PayLater’s NPF ratio remains well below the Financial Services Authority (OJK) threshold of 5%. Despite being at a safe level, the company continues to closely monitor its NPF rate and regularly evaluate credit policies to balance growth and business sustainability.

The user demographics for Indodana PayLater services are diverse, spanning multiple age groups, including 18-24 years, 25-29 years, and 30-39 years.

Financial Management as a Key Factor in BNPL Defaults

Indodana Finance identified poor individual financial management as a primary contributor to BNPL defaults. Iwan told Kontan that issues such as lack of financial planning, overspending beyond financial capacity, and inadequate understanding of pay-later obligations are among the main challenges.

"Therefore, we will continue to strengthen financial education programs to raise awareness of responsible financial management," he stated.

OJK Reports Rising NPF in the PayLater Sector

Recent data from OJK, as cited by Kontan, shows a steady increase in the gross NPF rate for BNPL services within financing companies. The NPF rate rose from 2.52% in August 2024 to 2.6% in September 2024, reaching 2.76% in October 2024. It continued climbing to 2.92% in November 2024 and ultimately hit 2.99% by December 2024.

PHOTO: INDODANA

This article was created with AI assistance.