Indonesia's Buy Now Pay Later (BNPL) market continues to grow significantly. Data from PEFINDO Biro Kredit (IdScore) shows that as of February 2025, the total number of BNPL debtors reached 17.26 million, marking a 25.53% year-on-year increase.

Tan Glant Saputrahadi, President Director of PEFINDO Biro Kredit, stated that this growth also aligns with rising credit disbursement volumes. “Credit disbursement in February 2025 reached Rp36.24 trillion, an increase of 27.65% YoY,” he said.

Average Monthly Credit Limit Nears Rp1 Million

IdScore data also indicates the average monthly credit ceiling for BNPL users is around Rp994,000. Credit quality is also improving, with the Non-Performing Loan (NPL) ratio recorded at 4.05% as of February 2025, which is a 0.19% improvement compared to the previous month.

Seasonal Trends: Ramadan Spurs Higher BNPL Usage

Tan Glant highlighted a seasonal pattern where BNPL usage spikes during Ramadan. Historical data shows disbursement rose by 3.09% during Ramadan 2023 and 5.4% in Ramadan 2024. However, these spikes are often followed by increased NPLs two months later, requiring industry attention.

Older Demographic Drives Credit Risk

According to Tan Glant, baby boomers contribute the most to BNPL bad credit. Those aged 55 and above tend to be less familiar with digital technology such as mobile banking, fintech, e-wallets, pay-later apps, and credit monitoring systems. “As a result, they monitor and manage their loans less frequently, increasing the risk of default,” he said.

BNPL Financing by Multifinance Firms Rises Sharply

The Financial Services Authority (OJK) also reported a surge in BNPL financing by multifinance companies. Agusman, Chief Executive of the OJK’s Financing Institutions Supervision, stated, “BNPL financing by multifinance companies reached Rp8.2 trillion as of February 2025, growing 59.1% year-on-year.”

Despite strong growth, OJK noted a slight rise in credit risk, with the Non-Performing Financing (NPF) gross ratio increasing from 3.37% in January to 3.68% in February 2025.

PHOTO: UNSPLASH

This article was created with AI assistance.