Debt Crowdfunding Growth and MSME Credit Risk in Indonesia's Sustainable Digital Economy (IAIC Transactions on Sustainable Digital Innovation (ITSDI))

Summary

• Outstanding P2P loans in Indonesia grew by 29.1% from Rp 59.64 trillion in December 2023 to Rp 77.02 trillion in December 2024.p.5
• MSMEs held 36.7% of the total outstanding loan stock at the end of 2024.p.1
• Outstanding loans rose by 20.5% in Java and by 57.8% in other regions.p.1
• On average, 32.0 percent of monthly P2P loan disbursements went to productive sectors.p.6
• Growth three months earlier is associated with a lower overdue ratio in Java with a coefficient of -0.084 (p < 0.01).p.1
• Outside Java, the association between three-month lagged loan growth and the overdue ratio is weaker with a coefficient of -0.011 (p = 0.079).p.1

Key insights

1. Outstanding peer-to-peer loans in Indonesia expanded to reach Rp 77.02 trillion by December 2024.p.5
2. Java dominated total peer-to-peer loan volume, holding 71.6 percent of outstanding loans at the end of 2024.p.5
3. Lending expanded fastest outside Java, with outstanding loans in Sulawesi Tenggara growing by 157.1 percent.p.5
4. The national default rate of loans more than 90 days overdue stood at 2.60 percent in December 2024.p.6
5. Current monthly loan growth displays no statistically significant association with provincial default rates.p.7
6. Loan growth three months earlier is negatively associated with overdue rates in Java but shows a much weaker link outside Java.p.7
7. Provinces with a larger average loan size per active borrower registered lower loan default ratios.p.7