OJK Reveals Reasons For The Rise Of Investment And Loans In Indonesia

JAKARTA - The Financial Services Authority (OJK) revealed several factors that caused the rise of illegal online investments and loans (pinjol) to personal loans (pinpri).

Chief Executive of the Behavior Supervisory of Financial, Education, and Protection Business Actors of OJK Consumers, Friderica Widyasari Dewi, said that demand and supply are the main factors for illegal loans and investments to loans.

Friderica explained, in terms of demand, how many people may have inadequate literacy levels about the basics of financial products/services, investment management and personal finances so that they do not realize the importance of checking official permits from the authorized authorities regarding product/financial services offerings before investing.

"In addition, public digital financial literacy is not adequate in responding to illegal loan offers, especially related to information available on digital devices (cell phones)," he explained in a written statement quoted on Friday, January 12.

In relation to illegal investment offers, the proliferation of The Casino Mentality among the community is in principle a paradigm of wanting to get rich quickly and easily in a short time without any consideration of the risks faced.

"People who get promises of big profits in a short time easily lose their rational assessments," he said.

In addition, the pressure from the social environment (peer pressure) to participate in investment opportunities can also affect a person's decision not to be labeled behind the trend or often called Fear Of Missing Out (FOMO).

The woman who greets Kiki said that the server used by Pinjol is outside Indonesia, however, efforts to overcome these obstacles continue to be carried out by asking for help from members of the Task Force who have the authority (Kemenkumham, Kominfo, Ministry of Foreign Affairs, and Police).

In addition, there is convenience in making illegal loan applications, related to this, the Task Force continues to search for parties who create applications by identifying URLs and name packages.

The search was carried out together with Kominfo and also involved Google and Meta.

"Therefore, education regarding safe and legal investment, as well as effective law enforcement, is strict and has a deterrent effect on illegal investment practices and illegal lending is very important to protect the public from this kind of fraud," he explained.