Indonesia Bad Loan Swells Over US$100 Million

A June 2023 Report from Otorista Jasa Keuangan (OJK), Indonesia’s financial services authority, revealed that the country’s online lenders have collectively accumulated 1.73 trillion rupiah (US$112.7 million) in non-performing loans as of that month. These refer to loans that are overdue for more than 90 days.

The amount marked a 54.9% jump year on year. It also outpaced the growth of total outstanding loans disbursed by the country’s fintech lending platforms, which increased 18.9% year on year.

An additional 3.45 trillion rupiah (US$224.8 million) of loans are 30 to 90 days overdue. 
Together, the bad loans total 5.18 trillion rupiah (US$337.5 million). They also make up 9.8% of the 52.7 trillion rupiah (US$3.4 billion) in total outstanding loans.

Individual borrowers contribute 77.8% to the total non-performing loans, with corporate borrowers making up the rest. The 19-to-34 age group is the most problematic, with 2.68 trillion rupiah (US$174.7 million) in bad loans or approximately 52% of the total. Borrowers aged 35 to 54 years follow suit, with overdue payments reaching 1.71 trillion rupiah (US$111.5 million) or 33% of the total problematic loans.

The aggregate ratio of delinquency over 90 days for fintech lending platforms stood at 3.29% as of June 2023 – an increase compared to the same period last year. In June 2022, the aggregate TWP90 for such platforms was 2.35%.

Currently, there are 102 online lenders that are registered and authorized under OJK.

That said, Indonesia’s fintech lending providers began recording net profits in January 2023. As of June, the lenders have collectively achieved 450.7 billion rupiah (US$29.4 million) in net profits.