New rules mandate Rp3 million income and age or marital status criteria.
Aimed at fostering financial responsibility and consumer protection.
By Fayza Nawra Avanitanya, Muthia Noor Safitri, Kenzie Aryasatya, Imam Fakhri Prayogo Harianto
January 17, 2025 at 16:30 GMT+7
The Financial Services Authority (OJK) has announced plans to enforce stricter regulations for paylater users, effective January 1, 2027. These measures will require a minimum monthly income of Rp3 million and mandate that users be at least 18 years old or possess marital status.
The new rules will apply to both new applicants and loan renewals, reflecting OJK's commitment to promoting responsible financial behavior. This initiative aims to enhance consumer protection and mitigate the risks associated with financial illiteracy, which can lead to debt traps. By emphasizing prudent borrowing practices, OJK seeks to foster a more sustainable and secure financial ecosystem for consumers.
OJK Logo | Source: Kompas
The Financial Services Authority (OJK) has mandated paylater providers to actively educate users on responsible usage and require the integration of users’ financial records into the Financial Information Services System (SLIK). This initiative aims to improve accountability and help users understand the implications of their financial decisions.
Additionally, OJK has emphasized its flexibility to revise these policies as needed to ensure they remain aligned with dynamic economic and industry conditions. By implementing these measures, OJK seeks to enhance transparency, stability, and trust within the financial ecosystem. These steps are expected to support sustainable growth in the rapidly expanding paylater industry while safeguarding consumer interests.
Paylater usage illustration | Source: Getty Images
As of November 2024, Indonesia's total paylater debt reached Rp30.36 trillion, marking an increase from Rp29.66 trillion in the previous month. The banking sector contributed Rp21.77 trillion to this figure, while multifinance companies accounted for Rp8.59 trillion, showcasing significant year-on-year growth driven by rising consumer adoption.
However, the sector faces notable challenges, particularly with non-performing financing (NPF), as gross NPF stood at 2.92% and net NPF at 0.81%. These figures underscore the growing need for enhanced regulatory oversight, improved risk management, and the implementation of preventive measures to ensure the long-term stability, resilience, and sustainability of the rapidly expanding paylater industry.
Sources:
CNBC
Jakarta Post
Tempo
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