Indonesia's soaring ‘buy now, pay later' debts fuel calls for tighter rules
Soaring debts in Indonesia from 'buy now, pay later' (BNPL) schemes have raised alarm, with financial regulators set to impose stricter rules to prevent young consumers from falling into borrowing cycles that could hurt their creditworthiness and long-term financial health .
As of November, debts from BNPL schemes – which allow users to pay for purchases in instalments, often interest-free – had risen to 30.36 trillion rupiah (US$1.8 billion), according to the Financial Services Authority (OJK), or a 42.68 per cent increase from the same month in 2023.
OJK also noted that nearly three per cent of those debts had been classified as non-performing financing (NPF), meaning users had failed to repay them.
In response to the rising debts, OJK is preparing new rules to tighten eligibility for BNPL users. Set to take effect on January 1, 2027, the rules will require applicants to be at least 18 years old and have a minimum monthly income of 3 million rupiah (US$185) to qualify for BNPL services.
'We don't want the younger generation to get caught in debt while they don't have the ability to pay it. That's why we set [the minimum age] to 18 years,' Ahmad Nasrullah, OJK's head of special financial institution supervision, told reporters during a media briefing on January 21.
'We want to mitigate this risk for both parties, from the borrower's side and from the lender's side.'
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