Tadpole Scheme in Online Lending Deemed Harmful to Consumers
JAKARTA – The Tadpole scheme in online peer-to-peer lending (pinjaman daring) is considered detrimental to borrowers because it imposes larger instalments at the beginning of the loan period. This payment pattern is seen as needing greater attention to consumer protection, especially as people typically access loans when they are in need of funds.
Harris Turino, a member of Commission X of the House of Representatives (DPR RI), highlighted the Tadpole payment pattern, which makes borrowers’ obligations larger at the start of the loan period and smaller in subsequent periods. According to Harris, the ease of access to online lending must be accompanied by responsibility from providers and regulators to ensure loan products are offered transparently and fairly.
“So, the Tadpole scheme means the loan obligations at the beginning are charged at a very large amount, and only become smaller later on. I see this issue not merely as a matter of online lending, but as an issue of consumer protection and the integrity of the financial services industry,” Harris said in a statement received on Monday (7/9/2026).
Nailul Huda, Director of Digital Economy at the Center of Economic and Law Studies (Celios), judged the Tadpole scheme to be unfair to borrowers. In his view, people take out loans because they need funds, so larger payment obligations at the start of the period can reduce the relative benefit of the money received.
“The Tadpole scheme has already been restricted by OJK because it is simply not fair to borrowers. Borrowers take out loans precisely because they do not have money to begin with,” Nailul said.
He explained that the Tadpole scheme is used by providers to reduce the risk of default at the end of the loan period. By charging larger instalments upfront, most of the borrower’s obligations can be paid off before the loan enters its final stage.
By way of illustration, a borrower takes a loan with a principal of Rp1 million and interest of Rp300 thousand, making the total obligation Rp1.3 million. Under a Tadpole scheme with three payments, the instalments may be unequal – for example, Rp700 thousand for the first instalment, Rp400 thousand for the second, and Rp200 thousand for the third.
With this pattern, most of the principal and loan obligations have been paid in the early period. For the company, this mechanism can reduce the risk of losses if the borrower defaults at the end of the period, but for the borrower, the pattern makes the payment burden heavier at the outset.
Nailul argued that if consumers have the capacity to pay more at the beginning, that should be an option, not an obligation. Consumers could also be given more flexible payment options so they are not automatically burdened with large instalments at the start of the loan period.
Nailul believes the online lending industry can still use ordinary instalment schemes if the Tadpole scheme is not applied. In his view, this situation could actually encourage platforms to improve their credit scoring systems to become more prudent.
According to Nailul, platforms have so far assumed the Tadpole scheme could be used to anticipate the risk of default. However, the pattern forces borrowers to face a high payment burden from the very start.
“Platforms have assumed that to avoid high default rates, the Tadpole scheme is the answer – yet the Tadpole scheme is precisely what forces borrowers to pay heavily at the beginning,” he said.
The fintech association is expected to take a stance aligned with the regulator on the application of online lending schemes. In his view, the association or the online lending industry should not adopt policies that exceed the regulator’s provisions, while consumer interests must continue to be considered.
Transparency of information and clear choices are considered important so that borrowers understand the financial consequences before agreeing to a loan. This is also one of the key aspects of safeguarding consumer protection and trust in the online lending industry.