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The Rise Of A Consumerist Lifestyle And The Ease Of Access To Offers Have Ultimately Led To 37 Percent Of Gen Z And Millennials Failing To Repay Online Loans
Monday, 23 Dec 2024
The involvement with online loans often stems from urgent financial needs. However, the continuous bombardment of offers across various platforms exacerbates the situation. "This online lending issue predominantly affects the millennial generation," stated Tina Talisa, a special staff member to the vice president, during a discussion on online loans and their impact on millennials in Jakarta on Thursday, December 19.
According to the former television presenter, the allure of these loans is heightened by the aggressive marketing strategies coupled with the ease of access. "Similar to Bank Emok, individuals do not need to visit a bank. Loan offers are made available right at their doorstep," she remarked.
Data from the Financial Services Authority (OJK), released in September, indicates that nearly 40 percent of non-performing loans in the online lending sector originate from Generation Z and millennials, specifically those aged 19 to 34, with a precise figure of 37.17 percent. Friderica Widyasari Dewi, the Executive Director of the OJK's Behavioral Supervision of Financial Services Providers, Education & Consumer Protection, noted that these two generational groups are particularly vulnerable financially. Their lifestyle choices often prioritize spending on leisure over saving or investing.
"Many young individuals find themselves trapped in online loans due to borrowing for consumptive needs and imprudent expenditures," she explained via video during the Business Indonesia Goes to Campus (BGTC) 2024 event at the Faculty of Economics and Business, Gadjah Mada University (FEB UGM) last August, as cited from the official FEB UGM website.
It is important to note that the negative consequences of irresponsible online loan usage are not limited to the youth. For instance, last week in Ngancar, Kediri Regency, East Java, a family burdened by online loan debt attempted suicide, resulting in the death of their youngest child. Three days later, another family in Ciputat, South Tangerang, Banten, faced a similar tragedy for the same reasons, leading to the loss of three family members.
