The Indonesian Fintech Lending Association (AFPI) has issued the alarming scale of illegal online lending (pinjol) in the country, warning that these illicit services not only harm the public but also erode trust in legitimate online lending platforms (pindar).

AFPI Chairman Entjik S. Djafar revealed that the outstanding financing from illegal lenders far exceeds that of legal platforms. As of June 2025, outstanding financing from registered pindar reached Rp83.52 trillion (US$5.1 billion).

“Our outstanding loans are around Rp80 trillion. Our research shows illegal loans are between Rp230 trillion and Rp260 trillion. Imagine, they’re far bigger,” Entjik said during a public discussion at the Celios office in Jakarta on Monday, August 11, 2025.

While the figure remains alarming, he noted a slight improvement, with a gradual shift of users from illegal pinjol to legal platforms since February 2025, though the number is still minimal. He pointed to low financial literacy as one of the main challenges in accelerating this migration.

AFPI is pushing for regulatory changes to allow the Ministry of Communication and Digital Application (Komdigi) to directly take down illegal lending applications without lengthy bureaucratic procedures.

“AFPI, Komdigi, and Google have regular meetings to identify illegal platforms for takedown. We’re already doing it, but it’s exhausting if the process takes too long. I’m confident that if Komdigi had a 24-hour patrol team, they could remove them right away,” Entjik said.

Muchtarul Huda, Director of Digital Space Oversight Strategy and Policy at Komdigi, confirmed that this proposal is part of the ongoing Government Regulation Draft (RPP) on combating illegal online lending platforms. The draft, initiated by the Ministry of Law, includes input from Komdigi and the Financial Services Authority (OJK).

“This is just a proposal for now. It could give Komdigi the authority to take down platforms without prior approval from OJK, fintech associations, or AFPI, but still based on OJK’s listings,” Huda said on Monday, August 11, 2025.

He stressed that Komdigi cannot arbitrarily take down platforms, as OJK is the sole authority verifying a lender’s legal status. OJK data serves as the primary reference for any removal action, though the listings are constantly updated.

“In principle, we’ll first discuss internally whether this input is effective and whether it can help minimize the spread of illegal online lending,” he said.