Indonesian Fintech Lending Defaults Rise Amid Economic Uncertainty

Rising Non-Performing Loans

The fintech lending sector in Indonesia has experienced an increase in default rates, with the 90-day non-performing loan (NPL) ratio reaching 2.82% as of September 2025. This represents a rise from 2.60% in August 2025 and 2.38% in September of the previous year. The Association of Fintech Lending Indonesia (AFPI) has addressed the growing concern over rising defaults in the peer-to-peer (P2P) lending space.

Seasonal Factors and Economic Conditions

Marcella Chandra Wijayanti, Chair of Education, Literacy, and Research at AFPI, explained that the increase in NPLs is attributed to seasonal factors and the prevailing macroeconomic uncertainty. Wijayanti noted that such fluctuations are normal and occur even in traditional banking sectors. She emphasized that the current economic conditions are marked by uncertainty, which affects loan repayment capabilities.

Implications for the Fintech Sector

The rise in NPLs highlights the challenges faced by the fintech lending industry in Indonesia. As the sector continues to grow, it must navigate economic volatility and maintain robust risk management practices. The AFPI's comments suggest that while the current default rates are concerning, they are not unexpected given the broader economic context.

Conclusion

The fintech lending industry in Indonesia is experiencing a rise in default rates, influenced by both seasonal factors and economic uncertainty. As the sector moves forward, it will be crucial for lenders to adapt to these challenges and implement effective strategies to mitigate risks.