W

ith hopes high for the future of Indonesia'€™s creative economy, multifinance firms are expected to extend their financial support for the country'€™s creative minds planning to start or expand businesses in the booming sector.

Last year, the country'€™s multifinance firms secured approval from the Financial Services Authority (OJK) to expand their business into several new sectors, including the creative economy, branching out from the automotive and heavy equipment financing sectors.

According to OJK data, multifinance firms disbursed a total of Rp 4.7 trillion (US$357.1 million) in the final quarter of last year to finance small creative businesses. OJK director of supervision for financing firms Andra Sabta said that the regulator expected multifinance firms to channel more funds this year.

'€œThe total amount was disbursed by 10 of the 200 member companies of the Indonesian Financing
Firms Association [APPI],'€ he said recently.

'€œIf some of the members were able to disburse that amount in just three months, I am sure all firms will be able to disburse at least Rp 6-7 trillion this year.'€

Of the total Rp 4.7 trillion disbursed to the creative economy, financing for culinary businesses, handicrafts and software and publishing were the top-three recipients, respectively, according to APPI data submitted to the OJK.

President Joko '€œJokowi'€ Widodo has repeatedly emphasized the importance of the creative industry to Indonesia'€™s economy and reiterated the commitment of his government to boost the multi-million dollar sector, claiming that technology and culture-based creative industries were the future.

Last September, the OJK and the Creative Economy Agency (Bekraf) gave their official endorsement for multifinance firms to start venturing into the creative economy sector.

Sixteen creative economy subsectors are overseen by Bekraf, including advertising, culinary arts, fashion, music and film. The agency has claimed that the sector contributed Rp 642 trillion, or 7 percent, to the country'€™s GDP last year.

Andra said he was convinced that multifinance firms would be confident abut branching out into the creative economy, which has been growing significantly, unlike the automotive and heavy equipment sectors, which were heavily hit last year by a global commodity prices slump.

OJK data show that the country'€™s multifinance industry, which deals mainly in vehicle and heavy equipment financing, booked Rp 425.7 trillion in total assets as of last year, growing only 1.25 percent year-on-year on the back of a nationwide drop in automotive sales.

Andra said the OJK was discussing with the government and business groups on to offer incentives, such as expanding the National Interest Account (NIA), to support the industry and its exports.

The NIA is a government policy introduced in the first economic stimulus package last year to push penetration to non-traditional export destinations that, despite being commercially non-viable, may help boost shipments.

Andra said state financing firm Indonesia Eximbank, also known as LPEI, had been appointed as the NIA carrier and already had funds in the pipeline to be disbursed as export financing for creative economy products through joint-financing with multifinance firms.

On Tuesday, the APPI signed a memorandum of understanding with the Indonesian Handicraft Producers and Exporters Association (ASEPHI) to help expand financing into the handicraft industry.

APPI chairman Suwandi Wiratno agreed that there would be more financing disbursed by multifinance companies to the creative economy sector this year, given the progress shown by sector players.

'€œCulinary arts, as well as small enterprises in food and beverages, have good prospects. For instance, the recent boom in food trucks has contributed to the culinary subsector, which is the biggest receiver of financing from us,'€ he said.

'€”JP/Grace D. Amianti