Women in Indonesia still face various challenges in accessing formal financial services. Cultural norms make men have the privilege of ownership of assets. The limited ownership of assets in women's groups has an impact on women's limited access to credit or loans from financial institutions. Based on the National Financial Inclusion Literacy Survey (SNLIK) released by the OJK in 2019, the financial inclusion rate of men was 77,24 percent higher than women's which was only 75,17 percent.
The development of technology provides an alternative for women's groups to access financial services that are easier and more affordable, one of which is through information technology-based lending and borrowing services or online loans. On the one hand, ease of access provides opportunities for groups of women who have not been served by formal financial institutions to obtain productive business capital in order to improve household welfare. But on the other hand, the various types of loans offered tend to be consumptive in nature which actually increases the risk of debt insolvency (over-indebtedness).
Women have relatively lower financial literacy, namely 36,13 compared to men at 39,94 percent (SNLIK, 2019). Low financial literacy makes a person exposed to the risk of high-cost debt, among others, due to ignorance or ignorance of the risks and costs of debt and the inability to measure the ability to pay debts. The ease of access to financial services through online loans, especially illegal online loans, without being accompanied by good financial literacy makes women groups vulnerable to being in debt due to the burden of high borrowing costs with short loan periods. Not to mention that weak consumer protection makes women often victims of intimidation, terror, threats, and sexual harassment by debt collectors.
The Responsibank Indonesia Case Study (2019) analyzes the profile of households experiencing debt indebtedness triggered by a lack of financial literacy, aggressive marketing tactics, practices predatory lending, and the lax credit screening process. One of the cases photographed is the case of Ibu WT, a 35-year-old woman who works as an entrepreneur. Initially, Mrs. WT applied for a loan through 7 online loan applications to pay for a car installment of 7 million rupiah. However, high borrowing costs with short maturities and intimidation during the collection process forced Ms. WT to continue to open new loan applications to cover previous loans. Within a period of 9 months, Mrs. WT was in debt up to 80 online loan applications with a total loan of up to 500 million rupiah.
Women are more vulnerable to inhumane debt collection methods through terror, threats of personal data dissemination, and sexual harassment in cyberspace by many illegal online loan application providers. Financial literacy and consumer protection efforts need to be continued to ensure that access to financial services is inclusive while respecting the dignity of women.
