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Unlicensed P2P lending offers fast cash at price of privacy
Shady P2P lending services often provide quick loans in exchange for the user's personal data, which is often misused by debt collectors to claw back funds.
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Illustration of P2P lending (Shutterstock/Zapp2Photo)
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meta charset="utf-8">Promises of breezy loan approval by unlicensed peer-to-peer (P2P) lending platforms have enticed some people in desperate need of cash — oftentimes at the price of privacy, as their personal data is misused or spread without their consent.
When 30-year-old small business owner Enny (not her real name) had to give one of her customers a refund earlier this year, she was frantically looking for a way to borrow money.
After failing to secure loans from various sources, she downloaded three P2P lending apps on her smartphone and immediately filed a request for a loan totaling Rp 2 million (US$140) from the platforms.
Her request was swiftly approved, although she was only given Rp 1.3 million by the lenders. She was given a deadline of one week to pay back.
At that time, she learned that the P2P lending platforms she was using was not authorized by the Financial Services Authority (OJK).
“There’s no sign that the platform is monitored by the OJK. It also provides access to several koperasi simpan pinjam [savings and lending cooperatives] and lenders at once,” Enny told The Jakarta Post. An authorized platform is usually managed by one company or provides access to one lender only.
“My proposal was also approved almost in no time, while a loan proposal through P2P lending apps usually takes several days to be approved.”
