TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Unsecured-loan time bomb ticking amid pandemic

Unsecured-loan time bomb ticking amid pandemic Easy money: A craftsman completes a bamboo-made becak (pedicab) miniature in Cimangenteung village in Lebak, Banten, on July 8. Banks are offering unsecured loans for small-scale enterprises, among other customers. (Antara/Muhammad Bagus Khoirunas)
Arwin Rasyid
PREMIUM
Jakarta   ●   Mon, July 20, 2020

Unsecured Loans (KTA) are one of the mainstay products of the banking industry. As personal loans, they are extended to micro businesses, formal and informal-sector workers and self-employed professionals. All sorts of people avail of such loans, ranging from teachers and public servants to street hawkers, food vendors and motorcycle taxi drivers.

According to banking sector data, KTA lending currently accounts for some Rp 142 trillion (US$9.8 billion) of the Rp 1 quadrillion of outstanding loans in the SME sector, or a total of 14.2 percent. On average, the loans vary between Rp 10 million and Rp 15 million. However, if we assume that the average KTA loan is Rp 15 million, there are some 10 million KTA borrowers in Indonesia today.

KTA lending is a mainstay banking product that is very popular among lower-income people.

One of the characteristics of the ...

to Read Full Story

SUBSCRIBE NOW

Starting from IDR 55,000/month

  • Unlimited access to our content on web and app
  • No advertising, no interruption
  • A bonus subscription to share
  • Bookmark and night mode functions on app
  • Subscription to our newsletters

We accept

Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.