Indonesia’s Fintech Industry Rebrands: From Pinjol to Pindar
In a critically important shift for Indonesia’s financial technology sector, teh term pinjol (online loan) has officially been replaced by pindar (online loans) as the official designation for fintech peer-to-peer (P2P) lending companies. This rebranding, introduced by the Financial Services Authority (OJK) in December 2024, aims to distance the industry from the negative stigma associated with illegal lending practices.
The Indonesian Joint Funding Fintech Association (AFPI) has been at the forefront of this change, emphasizing the importance of education and awareness.“We are not pinjol.We are pindar licensed by the OJK,” stated AFPI General Chair Entjik S. Djafar during a press conference in Padalarang, West Bandung Regency.
Why the Change?
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The decision to rebrand stems from the growing public distrust and fear surrounding illegal pinjol operations. These unregulated entities have been linked to aggressive debt collection practices, exorbitant interest rates, and even tragic outcomes, such as suicides attributed to debt-related stress.
AFPI Head of Public Relations Kuseryansyah highlighted the stark differences between legal pindar companies and illegal pinjol operations.“Pinjols are famous for having no rules, regulations, brutal collection, and so on,” he explained. “We have the spirit of wanting to disassociate that we are different from illegal loans.”
The Stigma of Pinjol
The term pinjol became synonymous with predatory lending due to numerous high-profile cases. For instance, a kindergarten teacher who borrowed IDR 3 million saw her debt balloon to IDR 70 million within three months. Such stories have fueled public outrage and tarnished the reputation of the entire industry.
to combat this, AFPI has been conducting thorough investigations through its Fintech Data Center. “We found that some borrowers had already paid off their loans, while others had good outstanding records,” Kuseryansyah noted. However,the association discovered that many illegal lenders operated under deceptive names like swift Money and Extreme Money,further complicating the issue.
Pindar: A Regulated Alternative
Unlike illegal pinjol operations, pindar companies are strictly regulated by the OJK. These regulations ensure clarity, consumer protection, and ethical practices. Such as, the OJK has capped interest rates for short-term funding tenors (less than one year) at 0.2% per day.
Additionally, pindar companies are required to obtain ISO 27001 certification, ensuring robust data and information security. “All employees, from the Office Boy (OB) to the CEO, must comply with these standards,” Kuseryansyah emphasized.
Key Differences Between Pinjol and Pindar
| Aspect | Pinjol (Illegal) | pindar (legal) |
|————————–|——————————-|——————————|
| Regulation | Unregulated | OJK-regulated |
| Interest Rates | Exorbitant | Capped at 0.2% per day |
| Data Security | no standards | ISO 27001 certified |
| Debt Collection | Aggressive and unethical | Ethical and regulated |
Moving Forward
The rebranding to pindar marks a new chapter for Indonesia’s fintech industry. AFPI is committed to educating the public about the differences between legal and illegal lending practices. “We emphasize, we are not pinjol but pindar,” Entjik reiterated.
As the industry continues to evolve, the focus remains on fostering trust, transparency, and consumer protection.For those seeking financial assistance, it’s crucial to choose OJK-licensed pindar companies to avoid the pitfalls of illegal lending.
Call to Action:
Stay informed about the latest developments in Indonesia’s fintech industry by following trusted sources like the OJK and AFPI. Always verify the legitimacy of online lending platforms before borrowing.
By embracing the term pindar, Indonesia’s fintech sector is taking a bold step toward rebuilding public trust and ensuring a safer, more regulated financial ecosystem.
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Redefining Fintech in Indonesia: A Conversation with Dr. Sri Harjati, Fintech Expert
Introduction:
The Indonesian fintech landscape is undergoing a significant transformation, starting with the rebranding of online lending platforms. The term ‘pinjol’ is being replaced by ‘pindar’ to dissociation from the negative stigma associated with unregulated lending practices. We have the pleasure of hosting Dr. sri Harjati, a prominent fintech expert, to discuss this critical shift.
Interview:
1.The Need for Rebranding: From Pinjol to Pindar
world Today News: Dr.Harjati, why was this rebranding initiative undertaken by the AFPI and the OJK?
Dr. sri Harjati: Thank you for having me. The rebranding is a strategic move to combat the growing public distrust and fear surrounding illegal online lending practices, often referred to as ‘pinjol’. These unregulated platforms have been linked to aggressive debt collection, high-interest rates, and even tragic outcomes.The aim is to disassociate legal fintech lending platforms, now called ‘pindar’, from these negative connotations.
2.The Stigma of Pinjol and the Rise of Pindar
WTN: How has the term ‘pinjol’ come to symbolize predatory lending, and how does ‘pindar’ aim to differentiate itself?
Dr. harjati: unluckily, ‘pinjol’ has become synonymous with predatory lending due to various high-profile cases and public outrage. the term ‘pindar’, on the other hand, represents regulated online lending platforms supervised by the OJK. These companies follow clear rules, prioritize consumer protection, and adhere to ethical practices, setting them apart from their unregulated counterparts.
3. Regulation and Consumer Protection
WTN: Can you elaborate on the regulations that apply to ‘pindar’ companies and how they ensure consumer protection?
Dr. Harjati: Absolutely. ‘Pindar’ companies are strictly regulated by the OJK, ensuring clarity, consumer protection, and ethical practices.For instance, interest rates for short-term funding tenors are capped at 0.2% per day. Additionally, these companies are required to obtain ISO 27001 certification, ensuring robust data and information security. this underscores the commitment of ‘pindar’ companies to maintaining openness and protecting consumers’ best interests.
4. Moving Forward: Educating the Public and Enhancing Trust
WTN: How essential is public education in this rebranding process, and what role does the AFPI play in it?
Dr. Harjati: Public education is crucial in rebuilding trust in the fintech industry. the AFPI is at the forefront of this effort, committed to educating the public about the differences between legal and illegal lending practices. They continually emphasize that ‘pindar’ companies are OJK-licensed and operate under clear regulations, unlike unregulated ‘pinjol’ platforms.
5. The Road Ahead for Indonesia’s Fintech Industry
WTN: What can we expect next from Indonesia’s fintech industry, and how can consumers protect themselves while utilizing these services?
Dr. Harjati: As the industry continues to evolve, the focus remains on fostering trust, transparency, and consumer protection. Consumers should always verify the legitimacy of online lending platforms before borrowing, staying informed about the latest developments by following trusted sources like the OJK and AFPI. By embracing the term ‘pindar’, Indonesia’s fintech sector is taking a bold step towards ensuring a safer, more regulated financial ecosystem.
WTN: Thank you, Dr. Harjati, for your insights into this significant shift in Indonesia’s fintech industry.
Dr.Sri Harjati: My pleasure. Thank you for having me.
