Young Indonesians Overspending, Fueled by “Paylater” Use: OJK commissioner
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JAKARTA – A concerning trend is emerging among young Indonesians, with many spending more than they earn, according to Friderica Widyasari dewi, a member of the Board of Commissioners of the Financial Services Authority (OJK). Dewi highlighted this issue during her remarks at the 2025 Financial Love story event held at the Office of the Ministry of Youth and Sports (Kemenpora) in Jakarta on Saturday, Feb. 22, 2025. The rise of “Paylater” services is contributing to this imbalance, notably among Gen Y and Gen Z. The Financial Services Authority is raising alarms about the financial habits of Indonesia’s youth.
Speaking at the 2025 Financial Love Story event in Jakarta, friderica Widyasari Dewi revealed survey data indicating a critically important portion of young adults are grappling with overspending. This trend, she noted, is exacerbated by the increasing popularity of “Paylater” services, which offer immediate gratification but can lead to long-term financial strain. The event, held at the Office of the Ministry of Youth and Sports (Kemenpora), served as a platform to address the growing concerns surrounding financial literacy and responsible spending among the nation’s youth.
“Bigger Peg Than the Pole”: A Generational Divide
Friderica Widyasari Dewi used a vivid analogy to describe the situation, stating, “so the young people now that from the survey, this is a survey of an self-reliant survey, the bigger peg than the pole is more in number.” This translates to a situation where expenses outweigh income for a significant portion of the younger population. This analogy underscores the severity of the issue, painting a clear picture of the financial imbalance plaguing many young Indonesians.
She further elaborated on the generational breakdown, explaining the extent of the problem across different age groups. “Gen Y 50 percent, the 60 percent z gene is bigger than the pole. So greater expenditure than income,” she stated, emphasizing that both Generation Y and Generation Z are significantly affected by this financial imbalance. The data highlights a worrying trend, suggesting that a majority of young Indonesians are living beyond their means.
The Rise of “Paylater” and Consumptive Spending
One of the key factors contributing to this trend is the increased use of “Paylater” services for consumptive spending. These services, which allow users to make purchases and pay for them later, have become increasingly popular in Indonesia, particularly among the middle class. The ease and convenience of these services have made them an attractive option for young consumers looking to make purchases without immediate financial strain.
According to a 2024 behavioral report on “Paylater users” in Indonesia, the largest demographic utilizing these services falls within the 26-to-35-year-old age group. Data from last year indicated that the total number of active “Paylater users” in Indonesia reached 13.4 million. This widespread adoption highlights the growing reliance on these services and their potential impact on financial stability. The report underscores the need for greater awareness and education regarding the responsible use of “Paylater” services.
Middle class society in Indonesia there have been many uses PayLater For consumptive
Friderica Widyasari Dewi, Board of Commissioners of the Financial Services Authority (OJK)
Long-Term Implications and OJK’s Role
Friderica Widyasari Dewi emphasized the importance of responsible financial management, reminding individuals that credit cards, “Paylater” services, and similar financial products are recorded in the OJK system. This record can have significant implications for future opportunities. The OJK plays a crucial role in monitoring and regulating financial institutions, ensuring transparency and protecting consumers.
“It was included in the SLIL OJK Financial Details Services system. So later if you are a job list, what kind of slik records will be seen. If you have a bad record in finance,it’s very difficult to work later,” Dewi warned,highlighting the potential impact on employment prospects. She further added, “the contract employee as well as, if you want an extension and others it is very troublesome if you have a bad record in the financial sector,” underscoring the importance of maintaining a positive financial history. The OJK’s system serves as a thorough record of an individual’s financial behavior, which can be accessed by potential employers and lenders.
Conclusion: A Call for Financial Prudence
The data presented by Friderica Widyasari dewi at the 2025 Financial Love Story event paints a concerning picture of the financial habits of young indonesians. The increasing reliance on “Paylater” services and the tendency to spend more than one earns pose significant risks to long-term financial stability.The OJK’s emphasis on responsible financial management and the potential consequences of poor financial records serve as a crucial reminder for young adults to prioritize financial prudence and make informed decisions about their spending habits. It is indeed imperative that young Indonesians develop sound financial habits to secure their future and contribute to the nation’s economic growth.
The Financial Red Alert: Why Young Indonesians Are Drowning in Debt and How to avoid It
Opening Statement:
A staggering 60% of Gen Z in Indonesia are spending more than they earn, driven by the seductive convenience of “Paylater” services. How is this urgent issue shaping Indonesia’s future?
Interview with Dr. Arya Prasetyo, Financial literacy Expert
Senior Editor: Dr. Prasetyo, this trend appears alarming. Why are young Indonesians, especially Gen Z and Gen Y, overspending to such an extent?
Dr.Arya Prasetyo: This phenomenon is rooted in a few key factors. First, the rise of digital payment platforms, which include “Paylater” services, has considerably altered spending behaviors. These platforms offer the allure of immediate gratification—make a purchase now, and pay later. This has created a disconnect between spending and income for many young people, especially with marketing emphasizing convenience and instant access to goods.
ancient Context:
Historically,financial education in Indonesia has frequently enough been integrated with customary banking systems,but it has not kept pace with the fast-evolving financial technology sector. as a result, many young individuals lack the necessary tools to manage such financial tools responsibly.
Practical Application:
One way to mitigate this is by incorporating financial education early on, focusing not just on traditional savings but also on understanding new financial technologies and their potential pitfalls.
Senior Editor: Your insights highlight the central role of “Paylater” services. Could you elaborate on how these services contribute to this financial imbalance?
Dr. Arya prasetyo: Certainly. “Paylater” services often come without significant immediate financial penalties, making them attractive to the youth, who predominantly use them for consumptive spending rather than investment or essential expenses. A study in 2024 revealed that among Indonesians aged 26 to 35, a substantial number are tying themselves to these financial obligations. This easy access to credit without immediate accountability can lead to a cycle of debt that persists over time.
real-World examples:
As an example, many young people might use “Paylater” to purchase electronic gadgets, which are non-essential items, leading to a pattern where spending surpasses earning. This form of financial strain develops gradually but can have long-lasting effects on credit scores and future financial opportunities.
key Takeaways:
To counter this trend:
- Education: Foster greater financial literacy specifically tailored to digital financial tools.
- awareness: Encourage responsible usage by underscoring the long-term implications.
- Regulation: advocate for frameworks that ensure transparency and protect consumers against predatory practices.
Senior Editor: Friderica Widyasari Dewi mentioned that future job prospects could be jeopardized by financial irresponsibility. Can you delve into the implications for personal and professional futures?
Dr. Arya Prasetyo: Indeed, poor financial management recorded within the OJK system can have far-reaching consequences.Financial behavior is increasingly scrutinized by employers and lenders. A negative financial record can deter companies from hiring or extending contracts,especially within roles that require financial acumen or trustworthiness.
Formal Viewpoint:
Indonesia’s OJK system, which tracks financial activity, acts as a comprehensive record of an individual’s fiscal responsibility. A tarnished record can thus become a barrier to both employment and financial mobility,underlining the importance of maintaining good financial habits.
actionable Steps:
- Monitor Activity: Stay notified about your financial record.
- Build Positive Credit: engage in prudent financial practices to strengthen your creditworthiness for future opportunities.
Senior Editor: It’s crucial to shift focus from current overspending habits. How can young Indonesians start adapting better financial behaviors?
Dr. Arya Prasetyo: Awareness is the first critical step. Young Indonesians must understand their spending patterns and the long-term consequences of living beyond their means.Here are some strategies:
- Set Financial Goals: Establish clear,attainable financial objectives.
- Budgeting: Implement a budget that includes savings and debt repayment.
- Financial Resources: utilize financial tools and apps that encourage saving over spending.
- Seek Advice: Engage with financial advisors to personalize advice suited to individual circumstances.
Conclusion:
Engage and Reflect:
As young Indonesians strive for financial independence, it is paramount to cultivate a culture of financial literacy and foresight. This involves not just understanding the mechanics of services like “Paylater” but also recognizing one’s personal financial limits and the broader implications for their futures.
We encourage readers to share their experiences and thoughts on social media or in the comments below. What steps have you or someone you know taken to manage finances responsibly? Your journey could be the beacon of change for others around you.