JHP Journal Editor’s Note
Cecep Mustafa
It begins innocently enough—with a download.
A few taps, a few fields filled out, and within minutes, money materializes in your account. It feels like magic—technology’s triumph over red tape, a small miracle for the weary and underbanked.
But magic, as every good fable warns, always comes with a price.
For many Indonesians, the sleek interface of financial technology—Fintech—has become less a gateway to empowerment and more a portal into digital bondage. Behind the smooth logos and cheerful slogans lurk the same old predators, now armed with algorithms and access to your contact list. The loan that promised relief soon devours its borrower, one late fee and one threatening message at a time.
The question, then, is not just about technology or innovation, but justice. How can Indonesia safeguard its citizens when financial predators now fit neatly in the palm of a hand?
The Siren’s Call of Innovation
Indonesia fell in love with Fintech fast. Who wouldn’t? In an age of instant everything—rides, meals, messages—it only made sense to demand instant money too. Fintech promised liberation from bureaucracy: no lines, no forms, no disapproving tellers behind glass. Just click, borrow, and live.
Peer-to-Peer (P2P) lending, especially, sounded revolutionary. It cut out the middlemen, matching lenders with borrowers like a digital matchmaking service for money. No collateral, no judgment, no delay. For many, it was the first taste of formal finance—modern, practical, and beautifully frictionless.
But as the nation embraced this frictionless future, something essential was lost: friction itself—the small resistance that protects people from sliding too far, too fast.
When the Platform Becomes the Predator
Somewhere between innovation and exploitation, the algorithm lost its moral compass.
Borrowers found themselves trapped in cycles of debt, their private lives laid bare when they faltered. Promises of “low interest” turned out to be illusions—numbers that multiplied faster than the borrower could understand. And when payment failed, humiliation followed: debt collectors weaponizing personal data, calling relatives, shaming debtors in WhatsApp groups.
These are not the isolated sins of a few bad actors. They are the predictable consequences of a system built on speed without ethics, access without accountability.
Even the law, it seems, blinked. The Financial Services Authority (OJK) limited loan size, but not loan interest. It revoked licenses but imposed no criminal sanctions. The result? A “shield full of holes,” to borrow a phrase from legal activists. By 2024, the Ministry of Communication and Informatics had blocked more than 800 illegal Fintech platforms—proof not of success, but of systemic failure.
Innovation had outpaced justice.
A Shield Full of Holes
Indonesia’s regulators—OJK, Bank Indonesia, and others—did not stand idle. They built frameworks, issued decrees, and even launched a “regulatory sandbox” to test new ideas safely. But these efforts, though well-intentioned, resemble patchwork armor against an advancing army.
The root of the problem lies in hierarchy: these rules are not laws. They lack the weight of undang-undang, the full force of legislative authority. Without that, even the worst offenders face little more than administrative slaps on the wrist.
More troubling still is the regulator’s self-imposed blindness. By defining P2P platforms as “technology companies” rather than “financial institutions,” OJK effectively narrows its own jurisdiction. It is a semantic sleight of hand with devastating human consequences. When the law cannot even decide what a predator is, how can it protect the prey?
Forging a Law with a Soul
The solution is not more code or more committees. It is law—with teeth, and with soul.
Indonesia urgently needs a Fintech law that is comprehensive, enforceable, and humane. A law that does not merely manage innovation, but defends dignity. Such a law must:
- Set Boundaries — Establish clear caps on interest rates and loan tenors, so that financial inclusion does not morph into financial suffocation.
- Impose Real Consequences — Introduce criminal sanctions for data abuse, harassment, and predatory lending. The fear of prison has a sobering effect on even the boldest algorithm.
- Guarantee Legal Certainty — Build a transparent system that protects both borrowers and legitimate platforms, ensuring fairness, predictability, and trust.
In short: elevate the framework from regulation to law—from a patch to a principle.
Reclaiming Technology for Humanity
The smartphone in our pocket holds both promise and peril. It can connect, empower, and uplift. But it can also entrap. Fintech was meant to democratize access to finance, not digitize exploitation.
Indonesia stands at a crossroads. It can continue patching leaks in a leaky regulatory boat—or it can build a seaworthy vessel guided by justice, compassion, and foresight.
Technology, after all, is not destiny. It is design. And design, when governed by wisdom, can serve the human spirit instead of feeding upon it. The real question is not whether Indonesia can tame the digital loan shark. It is whether the law can evolve fast enough to ensure that in this brave new Fintech era, progress remains a servant of justice—not its executioner.
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