The online lending industry (Pindar) has experienced rapid growth in recent years, making a significant contribution to national financial inclusion. Through inclusive regulations, Pindar services have helped individuals and micro, small, and medium enterprises (MSMEs) that remain underserved by the formal banking system, while also providing investment opportunities for both individual and institutional lenders.
However, along the way, the Pindar industry has faced serious challenges due to the proliferation of illegal online lending (Pinjol), fraudulent intermediary practices, and defaulting communities (galbay), all of which threaten public trust and the sustainability of the ecosystem. These issues could reduce liquidity, increase credit risks, and hinder the distribution of productive financing vital for national economic growth.
As a two-sided market connecting lenders and borrowers, the sustainability of Pindar heavily depends on maintaining a balance between both sides. Interest rates must be set with careful consideration of risks and platform viability to ensure fair economic benefits for all parties involved.
Compared to other ASEAN countries, Indonesia’s Pindar regulations are among the most prudent, as they establish limits on interest rates, governance standards, and protections for both lenders and borrowers—safeguarding the industry’s sustainability while preventing financial exploitation. Nevertheless, additional measures are still needed to strengthen trust and stability in the sector, such as eradicating illegal lending platforms, developing clear guidelines for handling defaults, and continuously educating the public on their rights and obligations when borrowing.
Through strong supervision, cross-institutional collaboration, and improved financial literacy, Indonesia’s Pindar industry can continue to grow in a healthier, fairer, and more sustainable manner—serving as a key driver of financial inclusion, expanding innovation opportunities for service providers, and enhancing efficiency in the country’s digital economy.
