Multifinance Company generally is an entity outside the Bank and Non-Bank Financial Institutions specifically to conduct business activities: leasing, factoring, Business Credit Cards and Consumer Finance. Business financing company scheme is based on the existence of underlying assets; financing nearby industrial network with industry manufacturers, distributors and brand holder sole; as well as easy and fast service, making financing industry closer to its customers than its lending industry peers.
While sharia Multifinance is a direct channel financing institutions with executing pattern corresponding to Islamic principles.Currently, there are seven sharia finance companies that run a business, whether it Islamic business unit or full fledge company. The total financing value of Islamic multifinance company in the first quarter of 2013 is around 312.9 trillion IDR. That is, the value of sharia multifinancing accounts for about 7.37% of the total loan finance companies overall.
Islamic Multifinance companies are now required to have at least two of the Sharia Supervisory Board is composed of one chairman and one member is appointed in a general meeting of shareholders on the recommendation of the National Sharia Board of Indonesian Ulama Council (DSN – MUI).
The development of sharia multifinance companies cannot be separated from the development of Islamic banking. Islamic banking industry together with multifinance companies channel funds which raised from the public. The difference is, the bank has the authority to collect funds from the public directly and simultaneously authorized distribute funds, then the multifinance company can only distribute funds to the community and it does not have the authority to collect public funds. Funds that channeled by multifinance company comes from banks. Islamic banking supervision is under Bank of Indonesia and Financial Service Authority while multi finance company supervision is under Financial Service Authority.
Islamic multifinance companies still keep a great potential for growth in areas such as in Gorontalo, East Java, Central Java, Padang, Aceh and Banten.