Acute Situation: Online Lending Debt for Indonesian Citizens Surpasses Rp100 Trillion

The Financial Services Authority (OJK) has revealed that the outstanding loans from online lending (formerly known as ‘pinjol’) for Indonesian citizens have surpassed Rp100 trillion, signalling continued growth within the financing sector.

OJK also noted that 8 out of 144 financing companies have yet to meet the minimum equity requirement of Rp100 billion, while 11 out of 94 online lending providers have not met the minimum equity obligation of Rp12.5 billion. Agusman, the Executive Head of Supervision for Financing Institutions, Venture Capital, Microfinance Institutions, and Other Financial Service Institutions at OJK, stated that all affected companies and providers have submitted action plans to the OJK. These plans include steps to fulfil minimum equity requirements through increased paid-up capital from existing shareholders, seeking strategic investors, and/or pursuing mergers.

Regarding performance, receivables from financing companies grew by 2.08% year-on-year in April 2024 (compared to 0.61% in March 2024) to reach Rp514.09 trillion, supported by a 10% year-on-year increase in working capital financing. The risk profile of these financing companies remains stable, with the gross Non-Performing Financing (NPF) ratio recorded at 2.89% (March 2024: 2.83%) and the net NPF at 0.78% (March 2024: 0.8%). The gearing ratio for financing companies decreased to 2.14 times (March 2024: 2.17 times), remaining well below the maximum limit of 10 times.

In the online lending industry, outstanding financing in April 2024 grew by 26.11% year-on-year (March 2024: 26.25% year-on-year), with a nominal value of Rp101.207 trillion. The aggregate bad credit risk level (TWP90) remains controlled at 4.62% as of April (March 2024: 4.52%).