Rontok In The Country Of Origin, Raup Cuan In Indonesia

Photo Illustration By Andry Winarko

JAKARTA The lure of convenience offered by online loans (pinjol) is indeed tempting because not all financial products and services are able to meet the needs of all levels of society.

The majority of customers are lower layers considering the relatively small loan value with so easy requirements. Unfortunately, many loans operate illegally. Big market spots are the reason financial technology (Fintech) companies from outside enter Indonesia.

Based on a report by the Financial Services Authority (OJK), illegal loans were dominated by companies from China. The head of the OJK Investment Alert Task Force, Tongam L Tobing, revealed that at the beginning of the proliferation of the 2018 midfield loan, his party had found 227 illegal loan companies in Indonesia, of which more than half came from Chinese developers.

He explained that the loan company from China shifted their shots to Indonesia after many collapsed due to tightening regulations in China related to borrowing money. In China there is a peer-to-peer lending tightening. Previously, it was very free. It could have an impact on us. Chinese companies that cannot be there, run here," Tongam said.

He stated that the Chinese developer named his company in Indonesian. One developer can operate two to three platforms. For example, developer Li Chen moved the Cinta Rupiah platform and Loan Money, the Xinhe developer with the Saku Fund and World Loans platform, as well as the Money Fund from developer Zhu Xia. The investors are thought to be from China as well. They twisted their money on the platform to invest.

"We suspect because they were being chased there, while their money was very much. So they came here. However, it is not certain what field the company is engaged in because the OJK cannot detect companies whose names are not registered," he explained.

Quoted from the ADB Institute records, the loan became popular in China after tightening bank credit in 2010, following two years of tightening stimulus to counter the global financial crisis that has occurred since 2008. In 2012, the accumulated volume of P2P lending fintech loans in China was less than 1 billion US dollars. However, everything changed 180 degrees in 2015 where loan funds reached 100 billion US dollars.

China's fintech industry P2P Lending is indeed growing faster than in other countries due to the absence of government interference. This is because it is not clearly regulated that the practice of the P2P lending fintech business in China is more like shadow banking, aka shadow banking, which is one of the slice gaps of the banking system set by the Beijing government.

The Chinese government at that time was active in eradicating shadow banking practices, ponzi schemes and so on, which are prone to fraud or fraud. Therefore, the Chinese government is trying to control excess debt and tighten the level of prudence and compliance in the fintech industry P2P lending. The government is also targeting to close the business of the fintech company P2P lending that distributes high-risk loans.

The Caixing Global report states that more than 80 percent of China's 6,200 P2P lending fintech platforms have been closed or are experiencing serious management difficulties, ranging from the problem of escaping funds to bad investment problems, and bad credit. The strict regulations issued by the government are estimated to cut the number of P2P lending fintech providers by 70 percent throughout 2019.

In early 2022, the police named the male Chinese citizen, YXC (38), as a suspect in the loan company PT Jie Chu Technology operating from Jakarta. The company is known to manage 11 illegal loan applications, such as Cash Go, Credit, Online Box, Liquid Credit, Cash 365, Cash Plus, Doku, Flash Fund, Borrowing Money, Rupiah Bags and Coffins.

Cuan, which was fostered by illegal loans from the Bamboo Curtain Country, is relatively large. In Mata Najwa's Youtube, one of the former employees of an illegal loan company with the initials R explained how the company where he worked first in looking for 'prey'.

R admitted to working at an illegal loan company for 3 months and positioned as a debt collection or collection collector. R said the company accessed the user's personal information and data accessing the application. Later, the personal data and information will be used to terrorize users if they don't pay bills according to schedule.

"If it's the owner, I don't know but I know the origin of the country. It's from China," said R when asked who the owner of the illegal loan company was.

R then said that the company could reap a profit of around Rp. 200 million per month. "If a year it can be Rp. 1, 2, or 3 billion," he continued.

Not only illegal loans, but the Chinese financial giant also invested in legal loans, one of which is Ada Kami. Quoting the annual report on Finvolution, Ada Kami is controlled by one of the financial companies from China Finvolution Group with an ownership percentage of 80 percent.

Finvolution itself is the largest financing giant from China that has been listed on the US exchange, namely NSDQ, with the stock code FINV. China's largest lending company has been established since 2007. The company is a pioneer in China's online consumer financing industry.

Previously, this company was founded under the name PPDAI. In 2018, PPDAI became one of the first 15 online lending and consumer financing companies connected to Baihang Zhengxin (Baihang Kredit), China's first integrated credit reporting platform.

It was only in 2019 that PPDAI invested in Fujian Hairia Bank and expanded its international operations in Indonesia with the permission of the Institute for Technology and Information-Based Financial Loans from the Indonesian Financial Services Authority in December.

Tongam L Tobing hopes that the public must be able to distinguish between legal and illegal loans. He stated that the characteristics of illegal loans are whether they are not registered or not on the list on the OJK page. Second, it is not known where the address is, including the management structure. Third, the conditions are very easy, only with photos of yourself and photocopies of ID cards that are available, but interest and fines are high.

The cut is 40 percent direct. Only IDR 600,000 borrowed 1 million. Another example is when the initial interest agreement is half a percent per day, after that it can be up to 2 to 3 percent per day. They commit fraud there," he explained.

The fourth feature, they asked that all contact number data on the cellphone must be accessed. "If this happens, disaster is in sight. When they don't pay at the promised time, they will carry out terror and intimidation of borrowers and all names in the contact number. Therefore, vigilance is needed on this illegal loan," he added.

Tongam further explained that currently there is a moratorium on loan registration, because the number is already very large. Therefore, people who want to make online loans only need to choose one of the 104 currently registered with the OJK.

A legal loan only asks for access to cellphone cameras, locations and sounds. Meanwhile, illegal Pinjol asks for access to cellphone contact numbers and HP storage. What needs to be remembered is that every loan offer via SMS or WA and the like is definitely illegal, so don't access it. Legal loans are not allowed to offer loans via SMS and WA," he said.

In addition, the OJK also carries out supervision and guidance, where if someone violates it, sanctions from administrative to revocation of business licenses have been prepared. In addition, there is also enforcement of a code of ethics carried out by the Indonesian Joint Funding Fintech Association.

Tongam also asked the public not to hesitate to report to OJK and the Investment Supervisory Board via email; be aware of investing @ojk.go.id, contacting contact number 157 or WA 081 157 157 157 or also reporting to the Indonesian Joint Funding Fintech Association. But if you have experienced terror or intimidation, you must report to the police so that legal proceedings are carried out," he added.

He revealed that the loan actually aims well to bridge the needs of community funds that cannot be served by the formal sector. However, this is sometimes misused by illegal lenders to ensnare victims.

Because, first, it is very easy to create this online loan web even though the permit is not obtained. Then send an SMS to the public. Both servers are abroad which is a challenge for the OJK.

Then from the community side, first the literacy level is low. Once they needed money then there was a link that offered online loans, they filled in, made loans there, it turned out that the online loans were illegal, they were trapped there. The two groups of people who already knew it was illegal but because of the basic needs that had to go to the loan even though it was illegal. There are also people who make loans beyond their payability. Then dig the hole to close the hole," Tongam concluded.