Financial technology (fintech) developments now make it easier for people to gain access to financial aid or loans, primarily through P2P lending.
The Financial Service Authority (OJK) listed 103 fintech providers operating as of February 2nd 2022. The growth of these services offers plenty of benefits for users, including more direct loan applications, fewer prerequisites, and faster disbursement.
However, along with the emerging number of legal fintech, Indonesians need to be very careful with many companies who claim themselves as credible online financial loan providers but turn out to be illegal online loans.
Users are highly advised to be aware of the differences between legal fintech and illegal online loans before applying for loans.
1. Legally registered and under supervision by OJK
Credible fintech companies have had the legal status as either registered or granted permission to operate by OJK, therefore all of legal fintech companies’activities are being closely regulated and monitored by OJK. Meanwhile, illegal online loans do not have any legal status under OJK, neither registered nor granted permission to operate. To check whether the company is legal, check out OJK’s website here. AdaKami is a legal entity registered and granted permission to operate by OJK.
2. Low and transparent daily interest rate
Unlike bank loans, where interest is calculated monthly, online loans calculate interest daily and has clear calculation. For shorter tenures, the interest rate is typically relatively low. AdaKami, for example, provides affordable interest rate of 0.4% per day, based on the regulation of OJK. This is relatively low compared to illegal online loans that provide financial support with high and unreasonable interest rate.
3. Low loan ceiling
As online loans can be disbursed within just one to three working days, the loan ceiling offered is much lower, at IDR 30 million at most compared to bigger financial institutions. In the other hand, illegal online loans may have different level of loan ceiling.
4. Short loan tenure
Legal fintech has clear loan tenure according to what’s showcased through the application, ranging from one month, two months, three months, and so on. Meanwhile, illegal online loans may have unclear and inconsistent longer loan tenure, meaning that some may enforce its users to pay back their loans earlier and not according to the agreed timeline.
5. Risk of data theft
Data leak is currently one of the most common threats in online activities, including online financial services. Borrowers should be advised to check with OJK for the legality of any given provider to minimize the risk.
AdaKami, a local P2P lending platform that offers collateral-free loans, is committed to giving the best online lending experience. It boasts features like simple registration and application, quick 48-hour loan processing, personal data protection and security guarantee for its users, and committed to practice ethical debt collection method. This combination makes AdaKami the best choice in fintech P2P lending.
AdaKami also continues to innovate and improve its security to prevent scams by operating the Intelligent Connection Profiling System or Incop to target scams via investigation and mitigation, supported by Artificial Intelligence to pinpoint possible frauds accurately.