Banking - OJK projects motor vehicle financing distribution to grow 11% by the end of 2024

Banking - OJK projects motor vehicle financing distribution to grow 11% by the end of 2024 In the midst of sluggish automotive sales, the Financial Services Authority (OJK) projects that motor vehicle financing distribution could grow by 9%–11% yoy by the end of 2024. Chief Executive for Supervision of Financing Institutions, Venture Capital Companies, Microfinance Institutions, and Other Financial Services Institutions, OJK Agusman, explained that the distribution of financing for the motor vehicle sector could still grow positively. Motor vehicle financing receivables as of May 2024 will increase 12.62% on an annual basis to IDR400.57 tn. (Source : Kontan) Comment : We believe the domestic banking industry total loan growth will reach both OJK and Bank Indonesia's ‘24F forecast (KBVS ‘24F banking sector loan growth is 10% yoy). On this backdrop, we like OJK's optimism that the consumer loan segment will significantly help the total loan growth of the industry this year. We also expect further government relaxation, coupled with continuing promotions from dealers and various automotive events, to overall become the solid catalyst to reach the growth expectation.