Vehicle Loans Increase, So Do Non-Performing Loans

Finance

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Adi Ahdiat 24/08/2023 17:16 WIB

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According to OJK data, the ratio of problematic vehicle loans (non-performing loans) continued to increase nationally during the January-May 2023 period.

Total Value of Motor Vehicle Loan Financing from Commercial Banks and the Ratio of Non-Performing Loans (NPL) in Indonesia (January 2022-May 2023)*

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Total Value of Motor Vehicle Loan Financing from Commercial Banks and the Ratio of Non-Performing Loans (NPL) in Indonesia (January 2022-May 2023)*

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Disbursement of motor vehicle loans (KKB) continues to increase, in line with the strong trend of using private transportation over public transportation.

According to data from the Financial Services Authority (OJK), until May 2023, the total value of financing from general banks to individuals (non-bank/non-business sector) for motor vehicle ownership loans nationwide reached Rp123.9 trillion.

The total value of motor vehicle loan financing from general banks in May 2023 increased by 1% compared to the previous month (month-on-month/mom), and grew by 18% compared to a year ago (year-on-year/yoy).

However, this increase was accompanied by an increase in non-performing loans (NPL).

In May 2023, the value of motor vehicle NPLs from general banks nationwide reached Rp2.2 trillion, increasing by 4.8% month-on-month (mom) and growing by 9.5% year-on-year (yoy).

During that period, the NPL ratio reached 1.8% of the total financing. This is the highest ratio of problematic motor vehicle loans since the beginning of 2023, as seen in the graph.

Although the figure is increasing, the ratio of problematic motor vehicle loans is still considered very healthy.

According to OCBC NISP, the NPL quality categories are as follows:

* Very healthy: NPL < 2%
* Healthy: 2% < NPL < 5%
* Fairly healthy: 5% < NPL < 8%
* Less healthy: 8% < NPL < 12%
* Unhealthy: NPL > 12%

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."