Two Eyes Of Pinjol Sword In Indonesia

JAKARTA Today your debt payment is due. If you don't pay it right away, we will immediately collect it at your home and office. We will also distribute your photos and data to telephone and social media contacts. Don't blame us if you are embarrassed and insulted.

That is one example of a short message sent by debt collectors aka debt collectors of peer-to-peer lending financial technology companies (P2P lending fintechniques) or those that people know online loans (pinjol).

Indeed, not all debt collectors send such messages. Usually, such messages are sent by debt collectors from illegal loans or loan companies that are not registered with the Financial Services Authority (OJK) and members of the Indonesian Joint Funding Fintech Association (AFPI).

Iskandar Sahputra has experienced a bad experience with illegal loans. The 45-year-old man who lives in Tebet, South Jakarta, feels embarrassed because the bill via text message is not only sent to his personal number, but also targets a neighbor's phone number.

"If you say ashamed, of course, I'm ashamed. My neighbors who didn't know anything suddenly also received a short message to remind me to pay bills. Yes, there were about four to five neighbors who were sent messages," he said when met by VOI, Saturday, January 13.

Iskandar admitted that he was forced to deal with illegal loans because at that time he needed money, while at the same time he had just laid off his place of work. In addition, he was also tempted by the easy requirements offered by the illegal loan.

"Yes, it's okay now (borrowing at an illegal loan). Borrowing money is not much, but it's a shame it can take weeks," he said with a laugh.

However, is a case like Iskandar Sahputra only experienced if you borrow from illegal loans? Some time ago, the Indonesian people were surprised by the borrower from an official loan (registered at the OJK) who committed suicide allegedly after being terrorized by debt collectors.

The case went viral on social media, both Instagram and X. The alleged victim is said to have borrowed Rp9.4 million. However, he is suspected of having to return around Rp18 million-Rp19 million due to the high administrative costs.

Terror also entered from DC which is suspected of being affiliated with the loan company. OJK then intervened to summon the ranks of high-ranking loan companies to clarify the alleged suicide case. As a result, although he admitted that he was concerned about the loss of one life suspected of being a borrower, the loan company admitted that it did not find any relationship between the company and DC that terrorized the victim.

Two Faces Of Pinjol

Unair Faculty of Economics and Business lecturer Zahrin Haznina Qalby revealed that the loan managed to quickly attract public attention because it could enable lending to anyone on much easier terms than banks and a much simpler process through applications.

According to him, on the one hand, borrowing does have a positive impact in the form of increasing financial inclusion which is one of the main targets of the government, as well as increasing the contribution of the financial sector to Indonesia's economic growth. On the other hand, borrowing also has various negative impacts, leading to the motion of removing loans from various parties.

In addition, the relatively low difficulty in developing business, making illegal loans that are not registered and licensed at the OJK increasingly mushroom. Illegal lending runs without following existing regulations, with the application of strangled flowers, billing systems accompanied by threats and violence, and leads to not least consumers who are depressed to suicide.

"Ironically, similar cases were not only found in illegal loans, but also legal ones. Recently, a suicide case was also found from one of the legal loan users, but is suspected of still carrying out various practices that violate the provisions, which makes it not much different from the illegal ones," he said.

Various cases related to borrowing also sparked the question of whether borrowing should be maintained or abolished from Indonesia? Zahrin explained that so far the government has tended to support Fintech development, including loans, because it is considered capable of driving the wheels of the economy and can match the roadmap of industrial revolution 4.0.

If viewed from a positive perspective, borrowing can also provide various benefits and fill in gaps that cannot be achieved by relying on other financial institutions. For example, related to the opening of credit access for MSMEs that often do not meet the requirements for applying for bank credit.

However, various phenomena that occur and make public perceptions tend to be negative towards loans as clear evidence that this is a serious issue and of course it cannot be ignored. The enforcement of existing regulations related to loans is still far from perfect.

"But another issue that has made the negative impact of lending increasingly amplified is the low financial literacy of our own society," he continued.

Based on the National Survey of Financial Literacy and Inclusion (SNLIK) conducted by the OJK, financial literacy in 2022 reached 49.68 percent which has increased compared to 2019 which was only at the level of 38.03 percent. However, despite the increase, this figure is still relatively low when compared to the level of financial inclusion itself which has reached 85.10 percent in 2022.

This level of financial literacy is even lower in relation to Fintech. Based on SNLIK data, financial literacy regarding Fintech is only 0.34 percent in 2019 and increased to 10.90 percent in 2022.

"Once again, although there is an increase, the level of financial literacy regarding Fintech is still very small even when compared to the average national financial literacy rate itself," said Zahrin.

He stated that even though borrowing can have a positive impact if used wisely, the low level of financial literacy related to Fintech, including the loan in it, indicates that people do not really understand how loan services work.

This then led to the taking of various inappropriate financial decisions from many people who later ended up being victims, either from illegal or legal loans. Therefore, the government needs to strengthen the enforcement of existing regulations and what is more crucial is the increase in financial literacy from our society.

"This can be started by understanding the differences between legal and illegal loans, understanding how the work and interest are applied, carefully reading the applicable terms and provisions, and being more careful with our personal data. Not for us to be antipathy to the loan completely, but so that we can be wiser in responding to everything. Thus, we can maintain the positive impact of the loan, but by suppressing the negative impact that can arise," explained Zahrin.

Tips Free From Pinjol

So what if someone like Iskandar Sahputra is already in debt? Unair's economic expert, Wisnu Wibowo revealed that there are several things that can be done if you are in debt.

First, it is recommended that the debt be repaid immediately. Because, if it is not repaid immediately, the debt collectors will do everything possible. For example, throwing threats and insults to spread personal information to contacts and family.

"Now, for example, it's already because the financial literacy is low, because the lifestyle or consumption is not controlled. If it's trapped, there are several solutions. One, online loans must be repaid immediately. At least you have to ask for restructuring," said Wisnu.

"Because it is increasingly considered not to make a commitment, it will take the customer's personal data, it can be made a group and then it is cursed at randomly, sometimes it is not the equivalent of the loan which is not much," he continued.

What if you don't have money to pay off? Wisnu suggested that you owe it to another place that has soft interest. However, he emphasized that you should not dig a hole to cover the hole, with debt again to technology finance or other fintech.

"The most rational thing is that it must be paid off. But you don't have money? What to do? You can seek a loan with soft interest. You can, for example, from a cooperative from an office, or a banking institution. In addition, there are interest-free loans. For example from a close relative, "he said.

In addition, customers who are in debt can also give up selling assets such as gold or other valuables. "If the loan is not available, like it or not, in the end we have to sacrifice assets or what can be used to close the loan. Tragically, it is because we demand greater sacrifices. But it's a risk from the loan if we are not careful," concluded Vishnu.

Member of the Indonesian House of Representatives' Finance Commission, Willy Aditya, encouraged the OJK to tighten supervision and blocking of illegal lending activities that are still troubling the public. He considered that the increase in social problems related to loans was because the government had not been maximal in tightening the enforcement of legal regulations against loan operators.

He encouraged the digital revolution of banking to overcome this phenomenon. Security, privacy and trust must be the key to the policy of digitizing finance and banking. In addition, legal rules that protect customers also need to be strengthened along with strengthening digital financial businesses.

"With the digital revolution, inevitably there must be a firm blue print and white print about guaranteeing customer protection, especially related to loans that the government must pay attention to," said Willy.