Tadpole online lending scheme criticized for harming consumers

The Tadpole scheme used in online lending (pinjol) is facing criticism for being detrimental to borrowers. This repayment structure requires significantly larger installments at the beginning of the loan period, with payments decreasing in subsequent periods.

Harris Turino, a member of Commission XI of the Indonesian House of Representatives (DPR RI), noted that this pattern raises concerns regarding consumer protection and the integrity of the financial services industry. He emphasized that the ease of accessing online loans must be accompanied by transparency and fairness to avoid exploiting those in urgent need of funds.

Nailul Huda, Director of Digital Economy at the Center of Economic and Law Studies (Celios), added that the scheme is inherently unfair. Since borrowers typically seek loans due to a lack of immediate funds, being forced to make large upfront payments reduces the actual benefit of the borrowed amount. While the scheme may help lenders mitigate default risks, experts suggest that higher upfront payments should be an option for consumers rather than a mandatory requirement.