jlk – The need for easy and quick financial access has been on the rise with the passage of time. Unfortunately, not all individuals can avail themselves of adequate banking services, especially those in remote areas or with low incomes. To address this issue, an innovation in the financial sector known as fintech, or financial technology, has emerged.
Fintech encompasses financial services that leverage technology as their operational basis. One of the most popular and sought-after types of fintech is peer-to-peer lending, also known as online loans (pinjol). Online loans facilitate direct borrowing and lending transactions between lenders and borrowers without intermediaries.
Online loans began to flourish in Indonesia since 2016, initially targeting Micro, Small, and Medium Enterprises (MSMEs) struggling to obtain business capital from traditional banking institutions. However, over time, online loans have expanded their reach to other segments of society in need of quick funds for various purposes, such as education, healthcare, consumables, and more.
The advantages of online loans compared to conventional financial services lie in their easier, faster, and more flexible processes. Borrowers simply need to download the loan app on their mobile phones, fill in their personal information, and apply for a loan according to their needs and abilities. Online loans also do not require collateral; instead, they utilize credit scoring based on borrowers’ financial data and track records in the industry.
Furthermore, online loans offer competitive interest rates and various loan tenures, ranging from a few days to several months. The loan amounts vary as well, from hundreds of thousands to tens of millions of rupiah. These platforms operate under the supervision and licensing of the Financial Services Authority (OJK) as officially recognized institutions in Indonesia.