Multifinance or finance companies are financial
institutions engaged in the business of lending funds to debtors or customers
to purchase goods or services. Multifinance companies are one of the important
financial institutions that have proven to provide benefits and contributions
to the community both in the business world and small and medium enterprises.
This
finance company is not included in bank financial institutions, but its
operations are still regulated and supervised by the Financial Services Authority. The difference between financing institutions
and banks is in the provision of funds or capital.
If
banks are allowed to provide funds in cash, finance companies usually cannot do
this, but only provide funds to the seller and then the seller provides goods
or services to consumers. Thus, the debt and credit bond that occurs next is
between the finance company and the consumer.
In
addition, another difference between multifinance companies and banks is that
multifinance companies cannot withdraw funds directly in the form of deposits
or savings from the public, but are only allowed to withdraw loan money.
Example
of a Multifinance Company
In
today's society, the services of multifinance companies are commonly used when
buying a motor vehicle. With the price of new motorized vehicles increasing
every year, it is difficult for people with small incomes to buy in cash.
Therefore, various motorized finance companies have emerged.
When
people want to buy a motor vehicle at a dealer, they are usually asked whether
they want to buy in cash or on credit. If you choose credit, the dealer will
usually connect the prospective buyer to a multifinance company that has
collaborated with the dealer. The multifinance company will conduct scoring or
analysis of the prospective buyer's data before finally providing funds to the
dealer as funds for the purchase of the motor vehicle.
If
approved, then the buyer only needs to pay a down payment at the beginning of
the agreement. The motorized vehicle can be brought home immediately. At the
same time, the buyer is obliged to return the multifinance company's funds
along with the agreed interest according to the selected financing program
every month.
Types
of Multifinance Companies
There
are several types of multifinance companies in Indonesia, including:
- Motor Vehicle Financing Company
- Machinery and Heavy Equipment Financing Company
- Electronic and Household Equipment Financing Company
