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Pay later or pay never? Bad debt may damage loan growth, analyst warns

Jakarta Post - September 4, 2023

Aditya Hadi, Jakarta – Buy now, pay later (BNPL) schemes, which are an increasingly popular way to complete payments for purchases after the transaction date, have led to a rise in nonperforming loans (NPLs), as many customers fail to complete their payments on time.

An analyst warned that the trend may slow down loan growth in the medium or long term. Other experts urged BNPL service providers to be more selective about offering the option to prevent an excessive number of defaults.

Credit rating agency Pefindo stated that outstanding pay-later debt amounted to Rp 25.16 trillion (US$1.65 billion) at the end of June, up 29.8 percent from mid-2022.

Source: https://asianews.network/pay-later-or-pay-never-bad-debt-may-damage-loan-growth-analyst-warns