Online Loans Easy to Liquidate, Recovery Challenges Still Big

Photo: Special

JAKARTA - Behind the ease of access to digital credit, which is now an important part of the development of fintech in Indonesia, there are problems that have begun to be highlighted, namely how customers get a recovery path when they experience difficulties paying loans. The phenomenon of easy-to-liquidate online loans does provide a quick solution for the community, but the recovery process is considered not to have developed in a balanced manner.

Dolpheen's CEO, who has been accompanying debtors in the debt mediation process for years, sees a pattern that continues to repeat itself in today's digital lending ecosystem.

"The money is easy to liquidate. But when someone experiences a financial collapse, the recovery path is still very limited. The online lending ecosystem is growing much faster than the financial recovery ecosystem," he said.

Faster Distribution Infrastructure is Developing

The online lending industry in Indonesia currently has a very modern system on the side of distributing funds. Identity verification is done automatically, disbursement takes place in real-time, and credit assessment algorithms are constantly updated to speed up the loan approval process.

People can even get access to loans in just a few minutes via a smartphone. This is what makes the easy-to-liquidate online loan service increasingly sought after by various circles.

However, according to Dolpheen's CEO, the recovery has not been going at the same pace.

Although there are actually several channels such as direct negotiations to the platform, LAPS SJK services, and debtor assistance, access to these services is still considered not simple and consistent enough.

"Someone can get access to a loan in eight minutes. But when they start having trouble paying, the same person can spend weeks just trying to figure out where to call," he explained.

Recovery Burden Still Beared by Debtors

In practice, the recovery process often feels administrative and confusing for people who are under financial pressure. Not all debtors understand the restructuring procedures or dispute resolution mechanisms available.

As a result, many people have to find their own solutions in the midst of difficult economic conditions. This situation shows that the digital credit ecosystem is still more focused on growth in distribution than the development of a strong recovery system.

Dolpheen's CEO assessed that the problem was not entirely the fault of a certain party.

"The government encourages financial inclusion, regulators build a supervisory framework, investors and financial institutions pursue growth, while online lending platforms focus on user acquisition," he said.

"However, the phase of default is still often seen as an individual debtor's business, not as part of an ecosystem that also requires recovery infrastructure."

Failure to Pay Needs to Be Viewed More Broadly

According to him, the way people view default also affects how solutions are built. So far, default has often been considered a personal failure, even though there are economic and structural factors that also affect a person's condition.

"The difference in perspective between default as an individual failure and as a consequence of structural gaps is a discussion that rarely arises in policy spaces," said Dolpheen's CEO.

He assessed that investment in the recovery system does not provide immediate benefits such as loan distribution. Therefore, the post-failure-payment phase often does not receive equal attention in the industry.

Financial Recovery Protocol Proposal

Based on years of experience accompanying debtors, Dolpheen's CEO proposed the importance of a more integrated restructuring and assistance system before the collection process increases.

This concept is referred to as the Financial Recovery Protocol, which is a mechanism that allows debtors to obtain an assessment of financial conditions, realistic payment simulations, standard restructuring options, and independent assistance access before facing heavier collection pressures.

"Before debtors enter the more intensive collection phase, they should first gain access to assessments of financial conditions, standard restructuring options, realistic payment simulations, and independent official support channels," he explained.

This approach is considered to help people better understand their financial situation and find more humane solutions.

Big Challenges of the Digital Credit Ecosystem

The development of the fintech industry in Indonesia has indeed succeeded in opening wider access to finance for the public. However, this success is considered incomplete without a clear recovery path when debtors face payment difficulties.

Dolpheen's CEO assessed that the next challenge for the industry is not only to accelerate loan disbursement, but also to build a mature and sustainable recovery system.

"Indonesia's digital credit system already has a very sophisticated infrastructure to accelerate access to financing," he concluded.

"The next challenge is how to build a recovery infrastructure that is just as serious so that the community also has a more humane and structured way out when faced with difficulties."

In the end, a healthy credit ecosystem is not only about how quickly loans can be disbursed, but also about how prepared the loan handling system is with the community to bounce back when faced with financial problems.