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February 11, 2025 | 01:33 pm
TEMPO.CO, Jakarta - Indonesia's Financial Services Authority (OJK) asserts that the situation in the financial services sector in 2025 will not get easier if compared to the conditions last year.
OJK Board of Commissioners Chairperson Mahendra Siregar highlighted several domestic and global challenges impacting the financial services sector.
"The challenges and uncertainties in 2025 are expected to be no easier," said Mahendra at the 2025 Annual Financial Services Industry Meeting (PTIJK) in Jakarta on February 11, 2025.
He noted that global economic growth would remain limited, with the normalization of interest rates in the U.S. and other developed countries continuing at a slower pace.
Mahendra also warned that uneven economic recovery among industrial nations could lead to varying monetary policies, affecting capital flows and financial asset values. Additionally, he emphasized that economic recovery would become more complex due to evolving geopolitical and economic dynamics.
"Trade policy that is more determined by political aspects rather than economic aspects potentially increases the fragmentation of global trade," he said. The OJK Chairman believes that this trade war could reduce the volume of global trade itself.
Mahendra also highlighted the challenge of policy divergence and the varying application of international financial standards across countries, which could impact the competitiveness of the sector.
Domestically, he pointed out structural issues within the financial services sector, such as the need to boost formal sector employment. Additionally, Indonesia must accelerate the recovery of purchasing power, particularly for the lower-middle class, which remains sluggish.
In 2024, the financial services sector faced key challenges, including heightened geopolitical tensions, uneven economic recovery, global trade fragmentation, and major elections in several countries, including Indonesia.
"Amidst these developments, the Indonesian economy and financial services sector have shown resilience and continued to grow well," said Mahendra.
Economic growth throughout 2024, he explained, was recorded at 5.03 percent. According to Mahendra, this economic growth in Indonesia is in line with positive financial sector performance indicators. Additionally, Mahendra considers that the growth is also supported by a solid capital foundation, sufficient liquidity, and well-managed risk profiles.
"From the intermediation aspect, banks have disbursed credit and financing amounting to Rp7,827 trillion, growing double digits in line with the target and reaching 10.39 percent while maintaining credit risk," said Mahendra.
Meanwhile, corporate financing receivables grew 6.92 percent annually to Rp503.43 trillion.
On the other hand, non-conventional intermediation such as outstanding peer-to-peer lending financing or fintech lending recorded Rp77.02 trillion. This figure grew by 29.14 percent compared to the previous year.
Furthermore, buy now pay later financing products carried out by banks and financing companies respectively amounted to Rp22.2 trillion and Rp6.82 trillion, growing by 43.76 and 37.6 percent annually, respectively.
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