Know What A Financing Institution Is And The Types Of Institutions

Know What A Financing Institution Is And The Types Of Institutions –  Financing institutions are the institutions that have an important role in economic development. This is because Financing institutions are business entities that help channel funds through financing and funding to various investments and economic development projects.

This institution is slightly different from Financing Institutions in that apart from channeling funds, they also have a license to raise funds. Therefore, Financing institutions have an important role in economic development because they are institutions that can be an alternative to getting capital.

The presence of Financing institutions makes it easier for businesses to get funding to develop their businesses, thereby helping the movement of the economy. For that, let’s discuss more what a Financing institution is and the types of these institutions.

Financing institutions

Based on Presidential Regulation of the Republic of Indonesia Number 9 of 2009, a financing institution is a business entity that carries out financing activities by providing funds or capital. When compared to Financing institutions, these institutions have a more specific task, namely helping channel funds for various economic activities such as businesses that require capital to develop their business activities.

These institutions help the economy move better by setting up capital to help businesses run optimally. Unlike Financing institutions, Financing institutions do not have the authority to raise funds so they focus on channeling funds to support economic activities. Next, let’s discuss the various types of financing institutions in Indonesia.

Types of Financing Institutions

Financing Company

This type is a business entity specifically formed for leasing, factoring, consumer financing, and credit card businesses. Further, let’s discuss one by one:


This type is often also referred to as leasing where these institutional companies help companies obtain finance leases to obtain goods to support their business processes. The presence of this type of company helps companies increase their productivity by helping procure goods needed for business development.

Show Accounts Receivable

This type is often called factoring where this type of company helps finance through the purchase, collection, and arrangement of short-term receivables originating from trade transactions carried out by previous businesses.

Consumer Finance

This type of financing provides financing by helping consumers get goods such as vehicles, electronics, and various other necessities and consumers will make payments back in installments.

Credit Card Business

This company is a company that helps finance the purchase of goods or services with credit card media. This company provides credit card services to various parties whose funding process is based on Bank Indonesia regulations.

The emergence of this institution is expected to be a solution to help economic movements which are often hampered due to limited capital. In addition to business, this institution also helps the wider community to obtain funding so that they can avoid moneylenders or various parties who apply high interest on each loan.

However, as a good society, you must be wise in controlling credit so that your finances can be controlled properly. Because instead of being a borrower, you can become a party that funds a business or venture through joint venture funding or equity crowdfunding. This system allows you to join a joint venture to fund a business so that you own shares of a business and will get dividends that are distributed based on the amount of profit earned.

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