The Dilemma of Fintech Lending and Qris on Micro-Interest Practices in Indonesia's Digital Ecosystem
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Fintech Lending and QRIS are being hawked as financial inclusion but in effect they have now created the new form of micro-interest practices. High annual effective interest rates on digital loans and transaction costs (MDR) for small merchants threatens to ensnare micro-economic actors into a fresh underwater debt trap,” says the report, adding that the amount of as much as Rs 500-600 could have transformed a tool of empowerment into a financial noose. A literature review of this kind is library research. Qualitative content and conceptual analyses of the data served as data analytic methods. The study concluded the following: 1). (a) Speeding up financial inclusion: the dual role of fintech lending and QRIS in opening access is that fintech lending and QRIS act as two speeding gears for financial inclusiveness. Fintech lending offers immediate credit access for the unbanked, and QRIS supports digital transactions of MSMEs (UGM 2019; Gany et al. The two form a virtuous cycle: QRIS produces transaction data, which Fintech Lending then uses to determine creditworthiness and allocate capital. 2). What’s behind that convenience: When we dig beneath the shiny veneer of paying by app, it becomes abundantly obvious that there is a hefty price tag. Fintech lending Then there’s the issue of the low daily interest rates when you convert them to annual ones, which can be very high (30% -100% +). 3). The crux of the matter – democratization of access vs. digital debt trap in micro-interest This is because what is at heart is a contradiction between democratization of access and the nature of debt, that EMI. In fact easy access to credit and small payments can have the ironic effect of keeping users from paying off their loans, as they compound interest more quickly than they can pay them down.
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