Indonesia’s Financial Services Authority (OJK) reported contrasting performances in the buy now pay later (BNPL) market across banks and multifinance institutions for February 2025. According to OJK data, BNPL loans distributed by banks declined on a monthly basis, while those by multifinance firms continued their upward trend.

Bank BNPL Users Decline Despite Annual Growth

Dian Ediana Rae, OJK’s Chief Executive for Banking Supervision, highlighted that outstanding paylater loans from the banking sector stood at IDR 21.98 trillion in February 2025, down from IDR 22.57 trillion in January. Despite the monthly drop, this marked a 36.60% year-on-year growth compared to February 2024. Additionally, the number of bank BNPL users dropped from 24.44 million in January to 23.66 million in February 2025.

PayLater loans accounted for just 0.25% of total banking credit, which reached IDR 7,825 trillion—an annual increase of 10.30%.

Multifinance BNPL Loans Surge Over 59 Percent Annually

In contrast, BNPL loans by multifinance companies grew to IDR 8.92 trillion in February 2025, showing a 59.1% year-on-year increase. This growth follows January’s multifinance BNPL growth of 41.9% YoY.

Signs of Pressure in Credit Quality for Multifinance

Despite the strong growth, multifinance institutions are showing early signs of stress in credit quality. The Non-Performing Financing (NPF) gross ratio rose from 3.37% in January to 3.68% in February 2025, signaling a need for closer risk monitoring in the expanding sector.

PHOTO: RADARBOGOR

This article was created with AI assistance.