‘Hijra’ Moment: Leaving the Dark Side of Payday Loans – Fri, Jul 29, 2022

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Sri Rahayu Hijrah Hati (The Jakarta Post)

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Jakarta ●
Fri, Jul 29, 2022

Indonesia has become the promised land for the development of the mobile payday loan market (locally known as Pinjol). According to data from the Financial Services Authority (OJK), as of April, 122 companies provide legal online payday loan services. But data from the Institute for Economic and Financial Development (INDEF) shows that 95 percent of payday loan services are illegal.

Many people choose to borrow money from a payday loan because (1) they receive the money instantly, (2) they face no restrictions on how to use the loan, (3) they have a bad credit score, (4) they do not require collateral , and so on.

From a marketing perspective, many companies from China are entering the Indonesian payday loan market due to the strict industry regulations put in place by their government. Since the Indonesian market is still in its infancy, foreign companies hope to grab a piece of the domestic market before any possible regulatory changes.

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