Bisnis.com, JAKARTA— The Financial Services Authority (OJK) said there are two foreign investors who are targeting financing or leasing companies in Indonesia.

Chief Executive for Supervision of Financing Institutions, Venture Capital Companies, Microfinance Institutions and Other Financial Services Institutions (PVML) OJK Agusman said that currently, the progress of the acquisition is still in process.

"We can say that currently there are two finance companies that are in the process of being taken over by foreign strategic investors," he said at the Press Conference on the Results of the November 2023 Monthly Board of Commissioners Meeting (RDK), Monday (4/12/2023).

Agusman said that the two foreign investors came from Singapore and South Korea. The acquisition of leasing by foreign investors is becoming a concern for the financing industry.

After the financial giant from Japan, Mitsubishi UFJ Financial Group (MUFG) together with PT Adira Dinamika Multi Finance Tbk (ADMF) were known to have acquired PT Home Credit Indonesia.

The company is also in the process of negotiating a plan to take over PT Mandala Multifinance Tbk. (MFIN) or Mandala Finance. KreditPlus, which was originally called PT Finansia Multi Finance, has also been acquired by the banking giant from South Korea, KB Kookmin Card Corp with share ownership reaching 80 percent in July 2020.

Even the Association of Indonesian Financing Companies (APPI) sees that there are still many foreign investors eyeing Indonesian leasing.

This is certainly a breath of fresh air for multi-finance companies in Indonesia to face future competition. The reason is that with this acquisition, the multi-finance company's capital will become stronger.

"This capital strength must of course be followed by domestic entrepreneurs, if domestic entrepreneurs are lacking, they have to look for investors," said APPI General Chair Suwandi Wiratno when met after the Member and Appreciation Meeting of the Association of Indonesian Financing Companies (APPI) in Jakarta, Tuesday (28/ 11/2023).

Suwandi said there are several reasons why foreign investors are still interested in acquiring finance companies. Especially because the regulations for finance companies in Indonesia are quite strict.

This way, the business runs more safely. Finance companies must also gain the bank's trust to obtain funding.

Not only that, foreign investors also see that Indonesia is a potential market with more than 270 million residents. Apart from that, there are many segments that can be carried out by finance companies.

“Finance companies can do anything from investment financing, working capital and multi-purpose. "So, there are two productive ones, namely investment and working capital, if it is consumptive it is multi-purpose," he said.