FINANCING INSTITUTIONS OTHER THAN BANKS

Often in business we need capital. Of course, this capital can be borrowed from banks or institutions other than banks. Of course, with borrowing on financial institutions other than banks will be charged a higher interest rate.

The following definitions explain some of the institutions other than banks which cover several fields, namely:

a. Leasing (Leasing)
b. Venture Capital
c. Factoring (factoring)
d. Business Credit Card
e. Consumer Financing (consumers finance)

Explanation:
a. Leases (Leasing)
The word actually comes from the word lease to lease, which shall mean renting. Leasing as a type of activity can be said is new or young in the activities carried out in Indonesia, which is just used in 1974. In Indonesia alone there are already some leasing companies whose status as a non-bank financial institutions.

Leasing function actually almost level with the banks, namely as a source of medium term financing (from one year to five years). Until now there is no specific law governing leasing. However, the practice of leasing business has grown rapidly, and to anticipate the need for a law to have a clear and definite grip.


b. Venture Capital (Venture Capital)
Officially there is a new venture capital institutions in Indonesia since the Presidential Decree No. 61 of 1988 on the financing institution, which shall be further regulated by decree of the Minister of Finance Number 1251/KMK.013/1988 About rules and procedures for financial institutions. The above provisions are the foundation for a strong side and is the only implementation of existing regulations for investors (investors) who wish to do business or the business.

What is meant by venture capital firms (venture capital company) is a business entity that conducts activities in the form of equity financing to a company's business partner (invester company) for a specified period.
While the definition of enterprise business partners (PPU) is a company that received financing in the form of investment from venture capital firms (PMV).

c. Factoring (factoring)
Institutions factoring or factoring is a financing institution in the conduct of business financing is done in the form of purchase and or transfer and management of short-term bills receivable or an enterprise of trade transactions within or outside the country. In factoring services are divided into two parts, namely financial services and non-financial services.

Factoring institution that lebihh known as factoring is one of the necessary financing institution in the business world. Factoring business is already known since 2000 years ago. At that time the business of factoring is still simple. Parties factors usually act as agenpenjualan which also gives credit protection. Such activities are categorized as general factoring.

d. Business Credit Card (Credit Card)
Credit card companies are business entities that do business financing to buy goods and services using credit cards. Credit card or better known as the credit card is a plastic card similar to the size of the ID card, issued by the issuer (issuer) and used by the cardholders (card holder) and serve as a substitute for cash payment and the recipient is the business man / traders (merchants) that have been set by publisher.

In Indonesia, many credit card issuers such as Citibank, HSBC, BCA, Bank Mandiri and others. The growth rate of credit card users in Indonesia is high. This is certainly a concern because we are more willing mengutang than saving money, will certainly have an impact on the low savings (national savings, Indonesia).

e. Consumer Finance (consumers finance)
The definition of financial institution customers (consumers finance) is an institution in the conduct of procurement funding for the needs of consumers conducted by the system of payment in installments or periodical.

The presence of consumer financial institution is actually on an informal basis has grown since a long time as part of the trading activity. But normally only recognized since 1988 through a decree of the Minister of Finance Number 1251/KMK.013/1988 that formally lifted to the surface of business payments, as an official part of the financial services sector.

Financial institution is different from the banks, although both are a source of funds needed someone. When the consumer finance will see what barng-financed goods, then the bank credits, the bank is looking at who the consumer who will receive assistance funds. Both these institutions have in common as its object the same, namely consumer goods and wear rates as a cost.