Indonesian P2P Lending Industry Faces Challenges from 'Galbay' Phenomenon

Rising Default Concerns Amidst Strong Growth

The Indonesian fintech P2P lending industry is navigating through a growing 'galbay' phenomenon where borrowers deliberately default on their loans. Despite this challenge, the industry maintains robust growth with 22.16% year-on-year increase in outstanding loans to Rp90.99 trillion as of September 2025. The non-performing loan rate (TWP90) stood at 2.82%, slightly higher than the previous month's 2.60%.

Industry Response to Default Trend

The Indonesian Fintech Lending Association (AFPI) has taken proactive measures by establishing a special task force to address reports of intentional loan defaults. AFPI's Head of Education and Research, Marcella Wijayanti, emphasized that while the phenomenon is concerning, the scale remains relatively small compared to the total loans disbursed. The industry is leveraging advanced technology and data analytics to better screen potential borrowers and mitigate risks.

Balancing Risk Management and Growth

Industry stakeholders are working to maintain a delicate balance between managing risks and fostering business growth. Marcella noted that an overly aggressive risk mitigation approach could stifle industry growth. The focus remains on serving responsible borrowers while managing the risks associated with intentional defaults.

Regulatory Context and Industry Performance

The Otoritas Jasa Keuangan (OJK) continues to monitor the industry's performance. The latest data shows that despite the 'galbay' trend, the overall industry remains healthy with controlled credit risk. The industry's ability to adapt to challenges while maintaining strong growth will be crucial for its future development.