Heaptalk, Jakarta — The Financial Services Authority (OJK) has released data indicating that Generation Z is most entangled in online loans.
The institution believes that irresponsible lifestyle choices are contributing to this phenomenon. “Many students are caught up in online loans due to their lifestyle. Therefore, they must be wise,” stated Friderica Widyasari Dewi, Head of the OJK’s Behavioral Supervision of Financial Services Business Actors, Education, and Consumer Protection, on the Instagram account @ojkindonesia.
According to OJK data, the total value of online loan disbursements from fintech lending reached Rp21.67 trillion in April 2024. Of this total, outstanding loans or unpaid loans from individuals amounted to Rp57.35 trillion, with men holding Rp25.78 trillion and women holding Rp31.57 trillion.
In terms of age, Generation Z dominates the outstanding loans from individuals, totaling Rp28.86 trillion. Concerning non-performing loans or those overdue by more than 90 days, Generation Z also leads, with a total of Rp667.10 billion in such loans.
In response to these findings, Friderica emphasized the importance of financial literacy for the younger generation. Financial literacy can protect them from falling into illegal financial traps. Additionally, it provides insights into the appropriate use of financial products, including online loans. This way, financial products can be used to improve overall financial health.
With sound financial literacy, Friderica notes, individuals will avoid illegal investments and not use financial products beyond their means. Essentially, all financial services products are intended to improve financial health. If the outcome is the opposite, it indicates something is wrong.
