On September 12, 2021, there was a small piece of news in Kumparan about the Chairman of the Financial Services Authority (Otoritas Jasa Keuangan/OJK) in Jember, West Java, Hardi Rofiq Nasution, who was curious about the rise of illegal online loan offers (Pinjaman Online/Pinjol). He wanted to investigate this practice and, through his relatives, act as if he would take advantage of one of the offers. The practice of illegal pinjol snares a lot of people who are already struggling as a result of the pandemic of COVID-19.

The concrete figure obtained from the field research by the Chairman OJK in Jember is that of a nominal loan of IDR 1 million. Only IDR 700,000 or 70 percent was transferred. The funds that must be repaid two days later are IDR 1,065,000, which means the interest rate is 52 percent or equivalent to the imposition of 26 percent loan interest per day. Using the annual bank interest calculation method, the numbers are fantastic, so it’s not surprising that this kind of 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 will not be easily trapped or succumb to the seductions of unreasonable profit-seekers, or what used to be referred to as “loan sharks” who seek prey, precisely from those who are experiencing difficulties. As loan sharks roam everywhere, communication industry players should also support this effort so that more and more community members will not experience bad luck coming in threes (indirect translation from Indonesian proverb “sudah jatuh tertimpa tangga”, or directly translated as hit by a ladder upon falling).

Massive efforts are needed, possibly starting from school, so that everyone can assess all offers critically and realistically. A proverb says, “If something sounds too good to be true, it probably is”. The meaning asks us to be wary if there is something that looks pretty tempting that it feels hard to believe because we are most likely being deceived or falling prey to scammers. So, since adolescence, we must become accustomed to assessing everything critically and not immediately consume the lure in front of our eyes.

Long before the Internet age, in the 1980s, tempting offers that seemed to originate from the heirs of the rich in Nigeria with tens or hundreds of millions of dollars were often blocked by the monetary authorities. Significant funds were needed to disburse it again, and the willing parties were promised a share of the funds. I myself have received such letters with postage stamps and addresses from Nigeria.

Social Issues
What is especially heartbreaking is the story of a grandmother in Germany who fell prey to persuasion. Her entire savings of several hundred thousand Deutsche marks vanished. Germany and other European Union countries still used their respective currencies at that time. They have not used the common currency of the Euro, which applied to all European Union countries gradually starting in 1999 except for the United Kingdom and Denmark. With Brexit supporters narrowly winning in the referendum, the United Kingdom does not need to be considered again as it has left the European Union. Practices like the above on the age of the Internet are growing, and now the countries recognized as the origins of these fraudsters are increasingly more diverse, with many Arab countries now becoming 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 my office with his wife to ask for an opinion on the money he had 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. With a heavy heart, I tell my acquaintance that there is very little chance of his money coming back. The retired man did not wallow in material abundance, yet I could not bear to say that his money was gone.

From the examples above, it is clear that the victims of fraud due to lack of financial literacy, in general, are not wealthy people. Many lose their retirement savings, so 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 money lending and borrowing; there is still a lot of ignorance in the insurance sector, especially on insurance companies’ claims, 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 players, 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.


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