OJK Highlights Surge in Defaulted Loans Among Young Borrowers

Alarming Rise in Non-Performing Loans

The Financial Services Authority (OJK) has raised concerns about the rapid increase in defaulted loans among borrowers under 19 years old in Indonesia's online lending industry. As of June 2025, there was a 763% year-on-year surge in non-performing loans for this age group, according to OJK statistics. The number of active borrower accounts in this category grew from 2,521 in June 2024 to 21,774 in June 2025, representing a significant increase in exposure.

Causes and Consequences

OJK Executive Agusman attributed the sharp rise to low financial literacy among young borrowers, stating that the lack of financial management awareness is a primary factor. The outstanding non-performing loans for this age group increased by 96% from Rp1.75 billion in June 2024 to Rp3.43 billion in June 2025. Despite the overall online lending industry maintaining a relatively stable non-performing loan rate of 2.82% as of September 2025, the trend among young borrowers remains a significant concern.

Regulatory Response

In response to these findings, OJK has implemented new regulations through SEOJK 19/2025. The new rules include a minimum age requirement of 18 years and a minimum income of Rp3 million for borrowers. Additionally, OJK continues to conduct public education campaigns to promote responsible borrowing practices in the online lending space.

Industry Context

The overall online lending industry in Indonesia continues to grow, with outstanding financing reaching Rp90.99 trillion as of September 2025, representing a 22.16% year-on-year growth. The productive sector received Rp31.37 trillion in financing. While the industry's overall non-performing loan rate remains manageable at 2.82%, the specific trend among young borrowers necessitates continued regulatory oversight and consumer education efforts.