Indonesia's Online Lending Debt Surges Amid Economic Challenges

Rapid Growth in P2P Lending

Indonesia's peer-to-peer (P2P) lending debt has reached IDR 90.99 trillion as of September 2025, marking a significant 22.16% year-on-year increase. This rapid growth is attributed to various economic factors affecting Indonesian consumers.

Economic Factors Driving Debt Growth

Bhima Yudhistira, Executive Director of CELIOS, identifies weakening consumer purchasing power as a primary driver. Household consumption grew below 5% in Q3 2025, while limited formal job creation and rising urban living costs pushed consumers toward online lending. The ease of access through simple processes like selfie verification has made these loans particularly attractive.

Risks and Challenges

Despite the convenience, online lending carries significant risks including high interest burdens and administrative penalties for late payments. Limited financial education among consumers exacerbates these risks, as borrowers often overlook the long-term consequences of high-interest debt.

Proposed Solutions

To address these challenges, experts recommend a multi-faceted approach: enhancing consumer purchasing power through minimum wage increases of 8.5-10% and expanding cash assistance programs to the fifth decile group. Additionally, improving financial literacy and combating corruption are seen as crucial steps in mitigating the risks associated with online lending.