Pay Later Business Facing Raising Interest Rate and NPL Risk

By Editorial Team 09/01/2023
Non performing loan
Summary

Buy Now Pay Later (BNPL) has become a popular payment option in Indonesia due to its convenience and flexibility. With lower financial inclusion and credit card penetration, BNPL offers Indonesians the alternative of paying a lower amount upfront at a lower or sometimes zero interest rate.

Research and Markets' latest report showed that BNPL's consumer search interest grew 16-fold in the Southeast Asian market, mainly driven by Indonesia. The gross merchandise value (GMV) of Indonesian BNPL is expected to reach US$25.3 billion by 2028, according to the Indonesia BNPL Business and Investment Opportunities report published by Research and Markets.

"This online lending trend is due to the large number of underbanked consumers who don't have access to credit and payment platforms, so consumers turn to alternatives such as BNPL to fund their purchases," Research and Markets wrote as quoted by FintechNews.

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