Pinjol Trends In Indonesia Increase, INDEF: Internet Makes It Easier To Access

JAKARTA - Currently, the trend of online loans is an issue that is being considered by the government in Indonesia. Because, not a few people are trapped by illegal loans.

According to Nailul Huda, Researcher at the Center of Digital Economy and SME, INDEF, online loans grew rapidly in Indonesia, an increase of 71 percent in December 2022, due to a spike in post-pandemic online shopping, especially among youth who tend to be consumptive.

"In June 2023, the average loan for youth under 19 years of age reached IDR 2.3 million, while for the age of 20-34 years was IDR 2.5 million, even though the average youth income was only IDR 2 million per month," Nailul explained in a statement received.

There are many factors that cause a spike in the trend of borrowing, especially in Indonesia, namely urgent needs, excessive spending habits, economic pressure, education financing, lifestyle, and low lending rates.

In addition, another factor that triggers an increase in the prevalence of online loans among young Indonesian adults is the change in behavior from the previous generation to the younger generation today.

Technological advances also play an important role in shaping financial practices from various generations. Historically, older generations tend to avoid debt. On the other hand, younger generations such as Generation X and Z are more open to debt in order to fulfill lifestyle desires.

"This problem is getting more and more concerning because youth income is lower than their debt from online loans. Therefore, concrete actions are needed to overcome the rise of illegal online loans," he said.

To overcome this problem, the Financial Services Authority (OJK), the Ministry of Communication and Informatics and the National Police has also developed a series of initiatives and tactics, ranging from online and offline education programs to account blocking.

"According to APJII (2023), 97.1 percent of the population aged 19-34 years has been connected to the internet. The availability of illegal online loans that are integrated with the internet makes access easier for youth," said Izzudin Al Farhas Adha, Center of Digital Economy and SME INDEF researcher added.

According to him, it is not only the duty of the government, but all levels of society must also cooperate with government and private agencies to overcome this illegal loan problem.