Peer to Peer Lending in Indonesia: advantages and disadvantages
sumber: http://www.tuhunugraha.com/digital-transformation/2018/01/07/2144/
Before technology developed rapidly, the provision of
credit facilities could only be given directly (face to face). but in this
modern era, the provision of credit facilities can be done through the
internet. at least a few decades ago, people tend to only have two choices if
they want to borrow money. First, borrowing from banks; or secondly, borrowing
from a loan shark. for loan interest, when compared to loan shark, of course,
loan interest in banks is much lower than if someone borrowed money through loan
shark. logically, of course everyone should borrow money from the bank rather
than borrow money from the loan shark. but the problem is, borrowing money from
the bank is not as easy as borrowing money from loan shark. Banks with the
principle of "Know Your Customer" and the principle of risk
assessment, cause only certain people who can borrow money at the bank.
Luckily, in nowadays there is a new system for debtors to
get credit facilities, i.e. by applying for loans to the P2P Lending website.
What is P2P lending? According
to POJK No.
77/POJK.01/2016, Peer to peer
lending (P2P lending) or Information
Technology-Based Money Lending
Services means the provision of financial services to match a lender with a borrower to enter into a loan agreement in
Rupiah currency directly through electronic
systems using internet networks.
The existence of p2p lending is certainly like a
"savior" for debtors or people who need credit facilities. How come?
Loan interest in p2p lending is much lower than loan
interest in banks. As well as for applying for loans, of course p2p lending is
much easier compared to banks (although for applying for loans is not as easy
as when borrowing through loan shark). There are many p2p lending websites
circulating on the internet, for example: Koinworks, Amartha, Investree,
Modalku, danamas, etc. whatever its brand, the system is same. what make
difference between one brand to another is just the admin fee if the debtor
requests a loan or if the creditors want to withdraw their money, and the other
differences can be seen from the amount of interest offered to creditors. some
loans have different interest rates, and usually the greater its interest, the risk
of default is greater too. On the contrary, the smaller its interest, the risk
of default is smaller too.
But just like the others, the p2p lending system has
its weakness too. Although p2p lending provides benefits and convenience for
creditors and debtors, but in this p2p lending system there are several
weaknesses that are detrimental to creditors. First, in the case of the owner
of the P2P lending platform, runs off creditors' money. This incident happened
in China in 2016. The P2P Lending platform named Ezubao, is known to use the
Ponzi scheme in carrying out the fraud. The ponzi scheme, or in the Indonesian
language better known as the "gali lubang tutup" scheme is a scheme
where the injection of funds from new investors is used to pay old investors. This thing is continuously happen until ezubao's income
from new investors is not as much as the money to be paid to old investors. Second,
the risk of default. Risk of default on lending is an usually common. but in
p2p lending, the risk of default is certainly greater than if investors invest
in the bond sector. This is because in the p2p lending system, the debtor may
provide false information related to personal data on the P2P lending platform.
This causes the risk of default due to creditors' money is taken away by the
debtor to be even greater. Normally if a debtor borrows money to a loan shark
or bank, then if the debtor does not pay, both the bank and the loan shark will
certainly make a forced effort so that the debtor pays the remainder of their
debt. but if the debtor owes on the P2P lending platform, then who will
guarantee if the debtor does not pay their debts? the P2P lending platform
usually doesn't spend too much effort in charging debtors who don't pay their
debts.
Actually the weakness of
this P2P lending system is more than what I explained above. and these
weaknesses are basically detrimental to creditors as lenders. I think the role
of government in this matter is very important. do not let the government,
through the FSA and the director general of taxes can only enjoy the results of
financial services institutions such as the P2P lending platform, without
providing protection to creditors as lenders.
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