JAKARTA (The Jakarta Post/Asia News Network): A growing number of young Indonesians have become concerned about how online loans could impact their futures, as companies begin scrutinising prospective employees’ credit scores and banks deny loans to would-be homebuyers over their online debt histories.
Social media users scrambled to check their credit scores on Aug 21 after a user on X, formerly known as Twitter, shared that five prospective employees applying for a job at her workplace, a financial institution, had been rejected over their bad credit history.
“Kol”, meanwhile, refers to a five-tier ranking of the collectability of a person’s loans. Kol 1 shows a healthy ability to service one’s debts, while Kol 5 shows that a person’s loan payments are severely overdue. P2P lending business Indonesians’ use of pay later services has increased by 17.7 per cent from last year, according to research by Kredivo and the Katadata Insight Center. Pay later payments now surpass bank transfers by more than 6 per cent. This has also led to the rise of nonperforming loans.
“I’ve never wanted to because I don’t have a steady income yet, so I’m afraid I wouldn’t be able to pay,” Fildza told The Jakarta Post last week. Companies from several industries, ranging from food to management consultancy, told the Post last week that their human resources departments did not check the credit scores of job applicants because they did not see the relevance to their lines of business.
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