Agreed:  Financing firm MPMFinance CEO Johny Kandano (second left), BNI Securities director Daniel Nainggolan (second right), MPMFinance director Venky C. Sutiono (left) and MPMFinance CFO & COO Hajimu Yukimoto converse after the signing of the company’s medium-term notes (MTN) in Jakarta on Friday. The MTN, which will have a maturity of three years, is the second of two issued this year by the company worth a total of Rp 300 billion (US$22.7 million). (JP/DON)

Financing firm MPMFinance, a subsidiary of automotive distributor firm PT Mitra Pinasthika Mustika (MPMX), projects double-digit growth in total financing this year despite sluggish car and motorcycle sales.

MPMFinance CEO Johny Kandano said Friday that the company expected its total financing to grow 20 percent to Rp 3.8 trillion (US$288 million) this year from about Rp 3.2 trillion in 2015, partly due to the company’s expansion to other businesses such as travel financing.

In February, MPMFinance, in cooperation with travel agent Dwidaya Tour, launched Mlaku Mlaku, a new financing service that allows customers to attain loans from the company to pay for vacation packages. In addition, the company is also considering issuing credit for home purchases.

Johny also said the downward trend in lending rates was expected to help increase financing for motorcycle and car purchases, the company’s main financing market segment.

“If the [central bank’s] rate goes down, people will ask for lower interest rates for financing. This will have a positive impact on market penetration,” he said.

Bank Indonesia’s (BI) gradual interest rate cut since early this year has been widely expected to reduce the cost of funds, which would in turn allow banks or financing companies to lower lending rates, which currently stand at double-digit levels.

“We are optimistic about reaching our financing target because we are not mainly focusing our financing in one sector,” Johny said after the signing of the company’s Rp 160 billion medium-term notes (MTN).

The funds to be raised from the issuance of the MTN will be able to help the company increase new financing to its customers.

The MTN, which will have a maturity of three years and interest rate of 7.77 percent per annum, is the second part of the company’s two MTN series issued this year worth a total of Rp 300 billion. The series A notes, issued in March, are worth Rp 140 billion.

These two MTNs have been bought by a Japanese investor, Sompo Japan Nipponkoa Insurance Inc. (SJNK), one of the holdings of JACCS, a Japanese-based consumer credit company that owns 40 percent of MPMFinance’s shares.

“We are a part of MPM Finance. We have been partnering with the company for more than 40 years.” Daniel Neo, CEO of Sompo Insurance Indonesia told The Jakarta Post.

The issuance of the MTNs is guaranteed by the Credit Guarantee and Investment Facility (CGIF) and arranged by BNI securities.

MPMFinance is a multifinance company that provides loans mainly for automotive, machinery and heavy equipment. The company also provides financing for electronics and furniture purchase.

The Jakarta-based firm has 82 branches and 50 satellite branches across the country.

MPMX, a consumer automotive company founded by William Soeryadjaya, the founder of Astra International Group. Astra owns 60 percent of MPMFinance’s shares. (win)

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