Jakarta. Teachers and students are among the most affected groups when it comes to defaulting on online loans, also known as peer-to-peer lending (P2P lending). Unfortunately, this is due to the low level of financial literacy among educators and students, a situation that is particularly ironic as Indonesia is nurturing its "golden generation" to realize its vision of Golden Indonesia 2045.

Muhammad Amin, an education consultant, emphasized that the government, along with the Financial Services Authority (OJK) and financial institutions, must prioritize enhancing financial literacy among teachers and students. This will enable them to make informed decisions and fully understand the risks associated with loans from P2P lending platforms.

"Most teachers are tempted by online loans because they are easily accessible, fast, straightforward, and confidential," said Amin, as quoted in Investor Daily on Wednesday.

According to data from the OJK, 42 percent of defaulted online loans come from teachers, making them the highest group affected.

Improving teacher welfare is seen as a solution to this issue. By strengthening the financial foundation of educators, they become less vulnerable to the allure of online loans, which often offer easy loan disbursement processes but come with high-interest rates.

Amin also suggested that increasing teacher salaries could help alleviate this problem. However, he stressed that as long as financial literacy remains low, cases of falling into online loan traps will persist.

"Therefore, promoting financial literacy among educators is crucial. They need to be educated on how to manage financial challenges. Increasing teacher salaries alone won't solve the problem of falling into online loan traps," he explained.

The OJK has lowered the daily interest rate for online loan services to 0.1 percent to 0.3 percent from the previous rate of 0.4 percent, starting earlier this year.

As of February 2024, according to OJK data, outstanding loans from peer-to-peer (P2P) lending companies reached Rp 61 trillion ($3.8 billion), up from Rp 60.1 trillion in January, with 16.6 million loan recipients.

The non-performing loan ratio or the 90-day default rate (TWP90) stood at 2.95 percent. Most defaulted loans were disbursed to young people aged 19-34, amounting to Rp 693 billion with 269,118 loan accounts.

The second-highest age group with defaulted loans was between 35-45 years old, with Rp 532 billion, followed by those above 54 years old with Rp 127 billion, and those under 19 years old with Rp 1.92 billion.

Meanwhile, the value of non-performing loans in fintech P2P lending (30-90 days) reached Rp 4.1 trillion. Once again, young people aged 19-34 contributed the most, with Rp 2.1 trillion and 1 million loan accounts, followed by those aged 35-54 with Rp 1.7 trillion, those above 54 with Rp 268 billion, and those under 19 with Rp 21.5 billion.