Young Adults Dominate Bad Debt in Online Loans

The Executive Head of the Financial Services Authority’s (OJK) oversight for financing institutions, venture capital companies, microfinance institutions, and other financial service entities, Agusman, stated that bad debt or non-performing loans in the online lending industry as of March 2026 were dominated by the 19-34 age group, comprising 48.65%. Meanwhile, the 90-day delinquency rate (TWP90) for online loans in March 2026 stood at 4.52% on an annual basis.

“This is in line with the increasing activity of online loan usage among the productive age group, resulting in relatively higher risk exposure and necessitating strengthened assessments of repayment capacity,” Agusman said in a written response, quoted on Sunday, 10 May 2026. According to him, non-performing loans are dominated by the consumer sector, as this sector depends on personal income and cash flow, making it more sensitive to repayment ability.

Based on OJK data, the total outstanding debt or financing in the online lending industry grew 26.25% annually to Rp 101.03 trillion in March. Meanwhile, Agusman noted that there are 16 online loan providers with a TWP90 above 5%.

Agusman explained that these providers do not necessarily have to stop disbursing financing. However, he stated that online loans need to prioritise prudent principles, including improving the quality of disbursement and risk management.

The Financial Services Authority is encouraging online lending providers to take improvement measures, including strengthening eligibility and repayment capacity 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 the application of prudent principles by online loan providers,” Agusman said.