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Indonesia: Online loan sharks intimidate and harass borrowers; activists call for better regulations

Author: Resty Woro Yuniar, South China Morning Post, Published on: 3 March 2019

"Indonesia's online P2P loan sharks are driving people to suicide," 04 March 2019

...[T]he unchecked spread of microlending, from online lenders not only from Indonesia but apparently from as far afield as China, Singapore, Canada and the United States, has resulted in new forms of intimidation and harassment of borrowers, sometimes with tragic outcomes.

...[A] Jakarta taxi driver who committed suicide left a note saying he owed money to online lenders and had been chased by debt collectors when he failed to pay up.

According to the Jakarta Legal Aid Institute (LBH), a non-profit organisation, he borrowed just 500,000 rupiah (US$36) – but fell into the trap of unregistered lenders who typically promise easy money, then apply exorbitant interest rates and administration fees that pile up by the day. These lenders then embark on aggressive debt-collection methods that include bothering the borrower’s family and friends, and even sexual harassment.


The sector’s lack of regulation allows local and foreign operators to swoop in and offer easy loans. Tobing says that from January to mid-February this year alone, his task force cracked down on 231 illegal online lending operators, bringing the total to 635 since it started operations in January 2016.

Most of the illegal lenders were from Indonesia, but up to 40 per cent were from China. Some computer servers used by online operators were traced to Canada, Singapore, and the US. Only 99 legal online lenders have registered with OJK so far.

...[H]uman rights activists and victims of illegal lenders think there should be tougher law enforcement against those who harass borrowers and abuse their personal information.

Read the full post here