OJK: pay later financing up 39.3% to $496.7m in March

The Financial Services Authority (OJK) of Indonesia reported a 39.3% year-on-year increase in pay later financing, totaling 8.22 trillion rupiah (US$496.68 million) in March 2025.

This growth was slower than the 59.1% rise in February.

The non-performing financing (NPF) rate for paylater services improved to 3.48% in March from 3.68% in February.

In fintech peer-to-peer (P2P) lending, outstanding financing reached 80.02 trillion (US$4.84 billion) , up 28.72% year-on-year, but slower than February’s 31.06%.

The debt-to-equity ratio rose to 2.26 times in March, still below the 10-times regulatory limit.

Additionally, 21 cooperatives under OJK oversight held total assets of 335.57 billion rupiah (US$20.28 million), with distributed financing of 210.71 billion rupiah (US$12.73 million). One-third are seeking licenses to operate as financial service institutions (LJK).

🔗 Source: Antara

🧠 Food for thought

1️⃣ Indonesia’s paylater market shows explosive six-year growth trajectory

The Indonesian paylater market has transformed from a nascent offering in 2019 to a multi-trillion rupiah industry by 2025.

When Ovo first introduced its paylater feature in 2019, it was among the pioneers targeting Indonesia’s large unbanked population with digital credit alternatives 1.

Six years later, the paylater segment has grown to Rp8.22 trillion (approximately $530 million) with a 39.3% year-on-year growth rate, demonstrating sustained consumer adoption despite the recent slowdown from February’s 59.1% growth 1.

This growth suggests paylater services have successfully tapped into Indonesia’s credit demand, particularly among younger, digitally-savvy consumers who previously lacked access to traditional banking services.

2️⃣ Improving credit performance signals industry maturation

Despite the substantial growth in paylater financing, the decreasing non-performing financing (NPF) ratio suggests the industry is enhancing its risk management capabilities.

The NPF ratio improved to 3.48% in March 2025 from 3.68% in February, indicating providers are refining their underwriting models and better managing credit quality even as they expand their customer base 1.