DIGIVESTASI - Konom explained several reasons why the age group 31-40 years old is vulnerable to defaulting on loans within the "buy now, pay later" (BNPL) or paylater financing scheme. One factor that causes millennials within this age range to become entangled in paylater debt is the heavy burden of living expenses. Nailul Huda, Director of Digital Economy at the Center of Economic and Law Studies (Celios), revealed that at the age of 31-40 years, many people have already entered a phase of life that involves marriage or living with a partner and having children. In this situation, their financial burden tends to increase, making it difficult for them to pay their paylater bills.

"With more needs, the ability to pay BNPL debts becomes more difficult because the funds that should be used to pay off debts are first used to meet living expenses," Huda said in an interview with Bisnis on Sunday (April 25, 2024). According to Huda, the key to improving non-performing loans (NPL) in the BNPL scheme is to enhance the quality of credit scoring during BNPL application. The most important thing, he said, is to analyze the living expenses of prospective borrowers and compare them with their income.

"In this way, we can determine the repayment ability of prospective borrowers. This requires integration between banking data and alternative data," he added. Previously, PT Pefindo Biro Kredit or IdScore reported that BNPL loans reached Rp1.42 trillion in June 2024, with the largest contributor to bad loans coming from the 31-40 age group, amounting to Rp540 billion.

"The age group >30-40 years old is the highest contributor to bad loans, at 38.03%, followed by the >20-30 age group with 31.7% [Rp450 billion]," said IdScore CEO Yohanes Arts Abimanyu in an interview with Bisnis on Sunday (August 25, 2024). Furthermore, the 41-50 age group contributed Rp300 billion in bad loans. Meanwhile, the under 20 to 20 age group recorded bad loans amounting to Rp40 billion, and the 51-55 age group contributed Rp50 billion. Those over 55 years old contributed Rp40 billion in bad loans.

The total BNPL credit loan portfolio was recorded at Rp30.14 trillion as of June 2024, an increase of 19.7% year-on-year (YoY) over the same period. The majority of BNPL users are in the 21-30 age group, with a total of 6.9 million debtors. "The largest distribution of BNPL users, at 48.06%, is in the >20-30 age group, followed by the >30-40 age group at 29.3%," said Abimanyu. The 31-40 age group has 4.2 million debtors, while the 41-50 age group has 1.8 million debtors. Users under 20 years old number around 866,200 debtors.