June 21, 2024

Association sees no issue with fintech firms offering student loans – Tech

he Indonesian Fintech Lenders Association (AFTECH) has asserted that cooperation between fintech platforms and universities is “not prohibited” by fintech regulations, provided there is “prudent and compliant credit due diligence”.

Danacita, a peer-to-peer (P2P) lending platform specializing in education, has entered partnerships with 86 higher education institutions, including the Bandung Institute of Technology (ITB), to provide student loans.

The interest rates offered by the platform are deemed higher than other financing offered by the institution, which has sparked some controversy.

“Each fintech [firm] has its own way of packaging products, and in this case, Danacita offers student loans,” AFTECH chairman Entjik S. Djafar said on Friday, as quoted in Bisnis.com.

While fintech platforms like Danacita could facilitate student access to affordable financing for their education, he noted that it was important for fintech platforms to carefully assess the creditworthiness of students before approving loans.

Failure to implement such measures could expose both students and universities to financial hardship through potential loan defaults, he said.

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“It’s even better with university partnerships,” Entjik added. “Their inherent understanding of their students enhances the selection process for loan recipients.”

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