The correlation between fintech lending and Indonesia's young population lies in their shared characteristics and needs. The younger generation, often referred to as millennials and Generation Z, are digital natives with an increasing demand for accessible and user-friendly financial services. Unlike traditional banking institutions, which often have complex bureaucratic processes and strict eligibility criteria, fintech lending platforms offer a simpler and faster alternative.

One of the main reasons why fintech lending has gained popularity among the young population in Indonesia is the ease of application and quick approval process. By leveraging technology and data analytics, fintech lenders can assess an individual's creditworthiness and provide instant approval, which is particularly appealing for young individuals who may not have established credit histories or collateral to secure loans through traditional methods.

Additionally, the rise of fintech lending in Indonesia can be attributed to the limited access to credit offered by traditional banks. Many young people in the country face challenges in accessing loans due to strict requirements, lack of collateral or geographical limitations. Fintech lending platforms, on the other hand, have a wider reach and are accessible to individuals across different regions, allowing them to tap into the under-served market.

As an implication, the young population has a significant influence on changes in consumption behavior, investment and financing. The potential for financing among the young population is still high, considering the relatively low household debt to gross domestic product (GDP) ratio in Indonesia, accompanied by consistent non-performing loan (NPL) ratios.

The demographic transition to a young population has shifted consumer spending toward increased consumption of services such as travel, entertainment, hobbies and dining out. According to the urban banking survey conducted by the Mandiri Institute, this spending is accompanied by an increasing need for financing, both from bank and non-bank loans.

On the other hand, the investment preference of the young population is relatively high, especially for deposits and stocks. International Monetary Fund data confirm that Indonesia has a household debt to GDP ratio and property credit ratio of 16.24 percent and 3 percent, respectively. Other countries in the region and emerging countries in general mostly range above 30 percent. This shows that there is still potential room for fintech lending, followed by the potential for increased credit risk, which has been maintained so far.