Gen Z and Millennials Dominate Bad Debt in Online Loans
Gen Z and Millennials Dominate Bad Debt in Online Loans
Jakarta, CNBC Indonesia — The Financial Services Authority (OJK) records that the outstanding productive financing in the online lending industry (Pindar) as of March 2026 grew 23.40% year-on-year to Rp34.66 trillion.
Alongside the increase in Pindar receivables, the 90-day delinquency rate (TWP90) or bad debt also rose from 2.77% in March 2025 to 4.52% in March this year.
“This growth trend indicates that the development of productive financing continues, although the portion of outstanding productive financing relative to the total outstanding Pindar industry financing is still in the process of increasing,” said Executive Supervisor for Financing Institutions, Venture Capital Companies, Microfinance Institutions, and Other Financial Service Institutions (KE PVML) Agusman in his official statement on Thursday (7/5/2026).
He revealed that bad debts in the Pindar industry in March 2026 were dominated by the 19-34 age group, accounting for 48.65%.
“This aligns with the increasing activity of Pindar usage among the productive age group, thus resulting in relatively higher risk exposure and requiring strengthened assessment of repayment ability,” he stated.
He noted that in March 2026, there were 16 Pindar Providers with a TWP90 above 5%. “These providers do not necessarily have to stop disbursing financing, but they need to prioritise prudence principles, including improving the quality of disbursement and risk management,” he said.
Meanwhile, bad debts are dominated by the consumer sector, given its heavy reliance on income and personal cash flow, making it more sensitive to repayment ability.
OJK encourages Pindar providers to take improvement measures, including strengthening eligibility and repayment ability assessments, enhancing credit scoring quality, improving collection effectiveness, while still safeguarding consumer protection.
OJK projects that TWP90 can remain manageable within controlled limits along with strengthened risk management, governance, and application of prudence principles by Pindar Providers.
“Going forward, the optimisation of the productive financing portion will continue to be encouraged through strengthened disbursement capacity and improved credit analysis quality. Thus, the productive financing portion can increase gradually while maintaining prudence principles and consumer protection,” he concluded.