On September 12, 2021, there was a small piece of news in Kumparan about the Chairman of the Financial Services Authority (OJK) Jember, Hardi Rofiq Nasution, who was curious about the rise of illegal online loan offers. He wanted to investigate this practice, and through his relatives, it was as if he would take advantage of one of the offers. The practice of illegal online loans ensnares many people already struggling due to the COVID-19 pandemic.

The concrete figures obtained from the field research by the Chairperson of the Jember OJK are that of a nominal loan of Rp1 million, only Rp700,000 or 70% was transferred. The funds that must be repaid two days later are Rp1,065,000, which means the interest rate is 52% or equivalent to the imposition of 26% loan interest per day. Using the method of calculating annual bank interest, the numbers are obviously fantastic, so it is not surprising that this practice is very troubling. However, at least there is still money to be earned.

For several years, OJK has emphasized the need for financial literacy so that people are not easily trapped or succumb to the seductions of unreasonable profit-seekers. In the past, the term used was “loan sharks”, who seek prey, precisely among people experiencing difficulties. Because loan sharks roam everywhere, communication industry players should also support this effort so that more and more community members do not seem to have fallen on the ladder.

It would take a massive effort and perhaps even start at school so that people can evaluate all offers critically and realistically. A meme in English says if something sounds too good to be true, it probably is. That is, asking us to be alert if something seems so tempting that it is hard to believe because we are likely to be deceived or fall prey to fraudsters. So, from childhood, we have to get used to assessing everything critically and not just swallowing the lure in front of our eyes.

Long before the internet age, in the 1980s, there were a lot of lucrative offers as if coming from the heirs of wealthy people in Nigeria whose funds were blocked by the monetary authorities in tens or hundreds of millions of dollars. To disburse it again, considerable funds are needed, and those willing to provide it are promised a share of the funds to be spent. I myself have received several such letters with postage stamps and addresses in Nigeria.

Social Problem
What is incredibly heart-breaking is the story of a grandmother in Germany who was swayed by this persuasion. His entire savings of several hundred thousand Deutsche marks disappeared. At that time, Germany and other European Union countries were still using their respective countries’ currencies, not yet using the common currency of the Euro, which was applicable in all European Union countries gradually starting in 1999 except England and Denmark. With Brexit supporters narrowly winning in the referendum, the UK does not need to be considered again as it has left the European Union. Practices like the above in the internet age are growing, and now the countries recognized as the origin of the fraudsters are increasingly diverse. Many Arab countries have now become their “domiciles”.

The area of ‚Äč‚Äčoperation of the fraudsters knows no national borders. About ten years ago, a retired high-ranking officer I knew came to the office with his wife to ask for an opinion on the money he lent to two foreigners claiming to be working at the United Nations. Several hundred million were loaned under UN-issued “certificates” as collateral. The promise was that the money would be returned in great recompense. He also asked that I not copy the document following the “UN officials” message. I tell my acquaintance that there is very little chance of his money coming back with a heavy heart. The retired man does not wallow in material abundance, and I cannot bear to say that his money is gone.

From the examples above, it is clear that the victims of fraud due to lack of financial literacy are generally not wealthy people. Many of them lose their savings for old age, so that these fraudulent practices pose a significant social problem. Until now, there is no concrete data, but I have seen many examples. This article only touches on lending and borrowing money. There is still much ignorance in the insurance sector, especially about claims to insurance companies, because there is often an expectation that all claims must be paid. A basic understanding of insurance is also part of financial literacy.

As I said above, PR actors and the communications industry, in general, need to participate in spreading financial literacy. So that it is not an individual effort, perhaps Perhumas or PR INDONESIA can coordinate between communication practitioners and government financial institutions to find the best way to disseminate financial literacy effectively.


Noke Kiroyan
Chairman & Chief Consultant, Kiroyan Partners

This article has been published in PR Indonesia magazine 78th Edition, issued on September 2021, page 65.


Download the clipping here.

share this insight

Share to Facebook Share to Linkedin

let's work together

Tell us about your project brief or just contact us
read other insights