Galbay Pinjol Becomes a Trend, IPB University Expert Reminds of its Dangerous Impacts
IPB University’s Faculty of Economics and Management (FEM) lecturer, Dr Laily Dwi Arsyianti, highlighted the serious impact of online loan (pinjol) defaults (galbay) that have been rampant lately.
She believes that the trend of galbay pinjol is not solely caused by economic factors, but rather triggered by the increasing consumptive behavior of society.
“This galbay phenomenon reflects the rampant use of pinjol which is no longer based on urgent or productive needs, but rather to fulfill lifestyles and follow social trends,” she explained.
She gave an example, many people force themselves to buy the latest mobile phone to follow the trend, even though their financial condition is not sufficient.
“Following trends has become a kind of obligation for this type of society. In fact, loans should be the last alternative when cash is not available for basic needs or to maintain cash flow for productive activities,” she explained.
As of March 2025, the Financial Services Authority (OJK) noted that the total unpaid peer-to-peer (P2P) lending fintech loans reached IDR 79,96 trillion with a default rate (TWP90) of 2,77 percent.
“Pinjol debt will not disappear even if left unpaid. In fact, the value can multiply due to interest,” said Dr Laily. All credit history is recorded in the Financial Information Service System (SLIK), previously known as BI Checking. Debtors will be subject to bad credit status if they do not pay their debts within 180 days.
According to Laily, this bad credit status will make it difficult for a person to apply for important loans in the future, such as home ownership loans (KPR), vehicle loans, or credit cards. Data in SLIK is updated a maximum of 30 days after repayment and reporting of bill write-offs. Dr. Laily also reminded that pinjol providers have various ways to collect debts, including accessing borrowers’ personal data.
However, she explained that in principle, loans are allowed as long as they meet three main conditions, namely being used for basic needs or productive activities, in accordance with their ability (maximum installments of 30% of monthly income), and have a strong intention to repay the loan.
“If even one of these three conditions is not met, then the risk of default becomes higher. So, economic hardship is not the main factor,” said Dr Laily.
She emphasized the importance of people understanding the terms and conditions before agreeing to a loan. “Always check the legality of pinjol providers through the OJK website,” she said.
Dr Laily also referred to OJK Circular Letter Number 19/SEOJK.06/2023. The policy sets the daily economic benefit limit for productive loans at 0,1% per day as of January 1, 2024, and for consumptive loans at 0,2% per day starting January 1, 2025.
From a sharia perspective, Dr Laily emphasized the importance of awareness to pay off debts. This is because debt will be passed on to the heirs. She also advised borrowers to repent, work harder, sell assets if necessary, and live a simple life or frugal living.
“Don’t hesitate to sell assets such as houses, land, or vehicles to pay off debts. Once the debt is paid off, the assets can be recovered. In addition, multiply alms to open the door to blessings,” she concluded. (dh) (IAAS/NRA)
