Companies or Financing institutions are business entities outside banks or other non-bank Financing institutions that provide loan facilities to their customers for a purpose.
Just like banks and other official institutions, the mechanism regarding financing companies is known to the state and has also been regulated in the Minister of Financing Regulation Number 84/PMK.012/2006 concerning Financing Companies.
In general, Financing institutions such as banks will provide liquid funds to prospective debtors. It is different with Financing companies. When you apply for credit to this institution, you will not get liquid funds, but the company’s approval to Financing your goods credit. So, the cash is paid by the Financing company to a third party, where you make a purchase transaction.
In Indonesia itself, Financing companies are something that you can easily find. Usually, this company model has joined to a certain product brand. This is done to facilitate buying and selling transactions carried out on credit for a product. Here are some Financing Companies that you may already be very familiar with.
1. Motor Vehicle Financing Company
As the illustration above shows, motorized vehicles are a no longer luxury item that is purchased based on desire. Motorized vehicles have now become a necessity to overcome the difficulty of accessing transportation in densely populated cities.
Even though they are often needed and needed, the price of motorized vehicles is still relatively high, making it difficult to obtain with cash payments. For this reason, many Financing companies concentrate on providing credit for motorized vehicles, both four-wheeled and two-wheeled.
2. Machinery And Heavy Equipment Financing Company
The number of industries and small and medium enterprises in Indonesia makes this country dependent on the presence of heavy machinery and equipment. These machines are certainly a tool to produce products that are needed and desired by the community, such as clothing, food, houses, and others.
Not all companies have sufficient funds to purchase machines and heavy equipment by cash. Moreover, if the business is still small and medium scale, it is certainly difficult to directly buy machines and heavy equipment for the production process. The option to make purchases on credit was finally taken to continue to run their business. The number of industries in Indonesia has also triggered the number of Financing companies that concentrate on heavy machinery and equipment.
3. Electronic And Home Appliances Financing Company
The number of household needs can be very large. Not only basic needs that demand to be met, but also secondary needs concerning family entertainment and completeness of kitchen utensils. For example, there is a desire to replace the television you already have with the latest flat screen product, which is a secondary home fulfillment.
All these desires in the end often collide with Financing problems, or the lack of sufficient funds to buy all these items. On the other hand, you feel the urgency to have those items that are big enough. At this time you can take advantage of the services of a Financing company.
Many Financing companies are engaged in credit services for the purchase of electronic equipment and household appliances. This is because the number of households in Indonesia is also abundant and requires Financing services that can make it easy to buy the goods they need in installments.