Ahead of Eid 2025, Demand for “Paylater” and Online Loans is Expected to Increase

JAKARTA, KOMPAS – Ahead of the momentum of Eid al-Fitr, demand for credit through the buy now pay later platform and online loans by the public is expected to increase. Although the current default rate is still within safe limits, the public and business actors are expected to remain vigilant and careful.

Based on data from the Financial Services Authority (OJK), credit distribution through the Buy Now Pay Later (BNPL) platform as of January 2025 reached IDR 26.69 trillion or grew 44.19 percent annually. This consists of BNPL for finance companies of IDR 7.12 trillion and BNPL for banks of IDR 22.57 trillion, which grew 41.9 percent annually and 44.65 percent annually, respectively.

Meanwhile, the financing balance by the online lending industry or fintech peer to peer lending as of January 2025 was recorded at IDR 78.5 trillion or grew 29.94 percent annually. This achievement is higher compared to December 2024 which grew 29.14 percent annually.

The Chief Executive of Supervision for Financing Institutions, Venture Capital Companies, Microfinance Institutions, and Other Financial Service Institutions of OJK, Agusman, predicts that this growth will continue ahead of the Lebaran holiday celebrations. This is similar to what occurred last year.

"We can learn from the facts that happened last year. By comparing the position of April 2024 with March 2024, it can be seen that the outstanding (balance) of BNPL financing by payment companies has increased. Likewise, the online lending industry has also increased," he said at the OJK Monthly Board of Commissioners Meeting in February 2025 online, on Tuesday (4/3/2025).

As an illustration, the BNPL of financing companies after the 2024 Eid al-Fitr or as of the end of 2024 reached IDR 6.47 trillion. This amount increased by 5.54 percent compared to the March 2024 period, which stood at IDR 6.13 trillion.

A similar growth was also experienced by online loans. As of April 2024, the balance of online loans was recorded at IDR 62.74 trillion, growing by 0.91 percent compared to the position in March 2024, which stood at IDR 62.17 trillion. Based on its proportion, consumer loans disbursed through online loans in April 2024 accounted for 68.14 percent of the total loans, amounting to IDR 14.77 trillion.

Based on the data, the growth of BNPL financing by financing companies and online lending is expected to increase during the 2025 Eid al-Fitr celebrations. This increase is hoped to remain controlled and not pose a risk of default.

Therefore, it is very necessary to be careful. Then, indeed the increase in digital transactions is also very interesting in society and many young generations do it, including for purchasing products through e-commerce, so it is necessary to be careful and vigilant together.

According to Agusman, the growth of BNPL financing of the financing company and online loans is in line with the maintained ratio of non-performing financing (NPF). In January 2025, the gross NPF of BNPL financing companies was 3.37 percent, an increase compared to December 2024 which was 2.99 percent.

Meanwhile, the 90-day loan default rate (TWP 90) for online loans in January 2025 was recorded at 2.52 percent. This also indicates an increase in financing demand by the public.

"Therefore, it is very necessary to be careful. Then, indeed the increase in digital transactions is also very interesting in society and many young generations do it, including for purchasing products through e-commerce, so it is necessary to be careful and vigilant together," said Agusman.

Contacted separately, the General Chairperson of the Indonesian Joint Funding Fintech Association (AFPI) Entjik S Djafar said that the growth of credit channeled by online loans cannot be separated from the level of literacy in the community who understand the difference between illegal online loans (pinjol) and online loans. Finally, the public is starting to be aware of choosing online loan applications that have obtained permission from the OJK.

Nevertheless, the results of the 2024 National Survey on Financial Literacy and Inclusion (SNLIK) indicate that the financial literacy rate of the Indonesian population stands at 65.43 percent, while the financial inclusion rate is at 75.02 percent. This means there is still a gap of 9.59 percent, which shows that the use of financial products or services is not yet accompanied by adequate literacy.

"As a result of increasing public literacy, there has been a switching of borrowers from illegal online loans to online loans, which of course affects the disbursement rate," said Entjik.

On the other hand, Executive Director of the Information Communication Technology (ICT) Institute Heru Sutadi argued that the growth of BNPL financing and online loans was mainly due to the ease of access by the public. This also correlates with the weakening condition of people's purchasing power.

According to Heru, BNPL and loans are alternatives for people to survive in the midst of a difficult economic situation. The phenomenon of Termination of Employment (PHK) which has recently emerged is one indicator of the economic condition.

"Like it or not, the mainstay is online loans. With easy online loans, people borrow without thinking about how to repay them. However, it is more to meet the needs of children's school, household, food, rent," he said when contacted from Jakarta.

In such conditions, people have no other choice, considering that access to loans from banks requires collateral as a guarantee. Therefore, regulators or governments need to anticipate the potential risk of default.