Jakarta (ANTARA) – Although police in Greater Jakarta have arrested three perpetrators operating illegal online lending services in Tangerang, more and more people continue to fall victim to similar practices amid the proliferation of several of these illegal fintechs.
The Ministry of Communication and Information Technology handled up to 447 cases of illegal FinTech during the period January to June 2021 by blocking their sites.
The National Police have confirmed that they received 370 reports of illegal online lending services in October 2021. As many as 91 cases have been resolved, with others still under investigation.
Maybe one or more times people have received messages on their cell phones offering credits, with enticing promises, filled with a contact number or even an email address.
The offer also comes with the option of providing assistance, such as with debt coverage or with credit card bills.
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Illegal online loan services usually approach potential borrowers with great deals, and registration is relatively easy. Simply use your ID card and the funds will then be transferred to the account immediately.
Yet, based on information obtained from the victims of these illegal practices, most of them ended up with high interest rates, and the length of the credit period is unclear.
If the customer is unable to repay the loan, the illegal loan department will intimidate them into paying, often in ways that could be viewed as an invasion of privacy.
Usually they will use the client’s personal data with photos to be posted on social media, of course, as well as fake stories, sometimes even with pornographic content.
Amid the current pandemic, dozens of people have become unemployed. Several of them then try to become entrepreneurs in order to survive. However, everyone needs financing to start a business.
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Difficulty accessing credit from banks and official financial institutions under the Financial Services Authority has forced dozens of people to resort to illegal loans.
Given their troubling existence, the Financial Services Authority is cooperating with the police to take action against this company, including disclosure of the case in the city of Tangerang.
Building the economy
Nowadays, the need for cash funds to rebuild businesses devastated by the pandemic is the main issue facing micro, small and medium-sized business players in Indonesia. Rebuilding a business is building the family economy to meet their daily needs.
Unfortunately, some of them don’t think long before getting a loan. Such a decision-making process leads to new, more difficult problems.
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This is evident from the ever-increasing number of people who end up claiming to be victims of these illegal loans. These illegal loans have emerged left, right and center as a solution for these business owners which provides convenience and immediacy in the loan application process. By simply using an ID card and allowing access to a personal cell phone, someone can easily get a loan of up to Rs 20 million (US $ 1,418).
This convenience and speed could not previously be obtained from the bank. Many people do not apply for credit from the bank and opt for borrowing from dubious companies as they seek faster disbursement without having to submit many documents.
To solve this problem, the four member state banks of Himbara (BIS, Mandiri, BNI and BTN) have collaborated to introduce DigiKU to make it easier for the public to obtain credit safely.
DigiKU collaborates with the e-commerce industry. It facilitates access to business actors, already present on the platform.
Bank Indonesia Governor Perry Warjiyo highlighted the importance of supporting digital transformation in order to encourage economic growth of MSME players.
Warjiyo expected DigiKU to be able to target business players more through online means and make it easier for them to apply for loans at low and affordable credit interest rates with appropriate terms.
Governor BI also expects DigiKU to integrate with QRIS, so that all business transactions can be recorded digitally. This can later become a credit scoring parameter to help traders apply for credit.
DigiKU aims to reach more MSME players by 2021. From the 2020 target of Rp 4.2 trillion (nearly US $ 30 million), Rp 2.9 trillion (approximately $ 205.6 million) US) have been achieved and will continue to increase with the increase in MSME players, who are already on board.
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Himbara President Sunarso said cross-sector collaboration, including banking and e-commerce, is deemed necessary, so that capital lending can be facilitated through technology. This type of collaboration is considered important to ensure that the public does not fall prey to illegal online lending services.
Thus, economic actors looking for capital or financing can obtain it easily. Additionally, business players may have digital business records that will be used as valuation parameters when applying for a loan.
Commercial actors no longer need to attach documents to obtain loan services.
Sunarso noted that the availability of digital banking services will help capitalize MSME players. It could serve as a solution to the problems caused by the emergence of illegal loans.
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As is known, with digital technology, people from various parts of Indonesia can easily access funds. However, it is preferable that the source of funds is from banks, which are more credible and with a more affordable interest for MSMEs, so that the distribution process is more secure.
Illegal loan services should cease to exist in Indonesia with official government digital-based financing products coupled with law enforcement on the ground.
Currently, there are indeed several growing loan companies, or even called fintech, several of which are also legal and affiliated with the OJK. Not all fintechs are bad. Some are needed by the community today, especially those who do not have access to banks.
People choose to borrow from illegal fintechs because the requirements are straightforward and the process is quick. Thus, the business and the field in which they are engaged can operate smoothly.
In the future, banks and other financial institutions should make the most of this digital technology. The goal is to provide an instant source of funds for people.
As an example, traders, with limited commodities so far, have boosted turnover through capital assistance, with easy access to applications.
So, in the future, the legal aspects of these loan services should be completed immediately. Verification should be done quickly to verify legality and ensure it is safe for the community.
The end goal is to prevent entrepreneurs from getting into credit problems caused by illegal lending services, especially during the pandemic.
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