Dr. Friderica Widyasari Dewi, Executive Head of Financial Services Business Conduct Supervision, Education, and Consumer Protection at the Financial Services Authority (OJK), reminded millennials and Generation Z that they are vulnerable to illegal online loans. They are also prone to fraudulent investments.
According to Dr. Dewi, millennials and Gen Z are financially vulnerable groups with lifestyles that tend to spend more on leisure than saving or investing.
“Many young people get trapped in online loans because they take on debt for consumptive needs and unwise expenses,” said the UGM Faculty of Economics and Business (FEB UGM) alumna on Thursday (Jun. 6) at the Bisnis Indonesia Goes to Campus (BGTC) 2024.
Dr. Dewi stated that millennials and Gen Z face financial issues, including fraudulent investments, due to the principles of You Only Live Once (YOLO) and Fear Of Missing Out (FOMO). The FOMO lifestyle causes individuals to feel left behind if they do not follow trends.
Meanwhile, the YOLO lifestyle is often associated with enjoying life to the fullest and with freedom. These principles have led young generations to make poor decisions, including not preparing emergency funds.
Dr. Dewi said young people’s vulnerability is also triggered by their habit of frequently sharing personal information on social media. This behavior is hazardous, yet they are unaware of it. Irresponsible parties can exploit ID cards, home addresses, and other personal information uploaded carelessly online.
Additionally, Dr. Dewi mentioned that the FOMO attitude also leads young people to fall for fraudulent investments. This group often faces enticing offers without adequate financial and investment understanding.
“They often imitate what influencers or their idols do, including financial advice,” explained the Chair of the UGM FEB Alumni Association (Kafegama).
She urged students to understand financial planning properly. After all, students are part of the next generation that will build the nation. Gen Z and millennials make up more than half of Indonesia’s population, and they are critical economic players who need to be equipped with adequate financial understanding.
The 2022 National Financial Literacy and Inclusion Survey (SNLIK) conducted by OJK recorded that young people in Indonesia have low financial literacy and inclusion levels.
The financial literacy rate for those aged 15-17 is 43 percent, while the financial inclusion rate is 69 percent. These figures are far below the national financial literacy and inclusion rates of 49.7 percent and 85 percent, respectively.
Therefore, Dr. Dewi emphasized increasing financial literacy and inclusion among young people. This step is expected to keep them away from fraudulent investments and illegal online loans.
Multi-Party Collaboration
Meanwhile, Parjiman, Head of OJK Yogyakarta, stressed the need for collaboration among parties to improve financial literacy and inclusion in Yogyakarta. Collaboration is needed between the government, financial service industry players, media, and higher education institutions.
This effort is necessary to narrow the gap between financial literacy and inclusion. Higher financial inclusion compared to literacy means that more people are utilizing financial products and services without understanding the risks correctly.
The 2022 SNLIK recorded that the financial literacy index of Indonesians is 49.68 percent. This means that only half of the population has been well-educated about financial products and services.
“Out of every 100 people, only 50 percent or half are well-educated about financial products and services. The other fifty percent are still in the dark,” he explained.
Parjiman says the index needs to be improved, including in Yogyakarta. The index in Yogyakarta is 54.55 percent, higher than the national average.
“We need to improve financial inclusion here as it is slightly below the national average, at 82.68 percent,” he said.
Parjiman appreciated BGTC 2024 held at FEB UGM, considering it a good form of collaboration to enhance public education and literacy, especially regarding financial products and services.
Dr. Gumilang Aryo Sahadewo, Vice Dean for Research, Community Service, Cooperation, and Alumni at FEB UGM, welcomed BGTC 2024. He hoped this activity would improve students’ understanding and soft skills, especially those related to finance and investment.
“Financial and investment literacy are competencies that Indonesian human resources must possess. Through this event, we hope that students can gain knowledge and soft skills related to financial and investment literacy,” he explained.
Reportage: FEB UGM/Kurnia Ekaptiningrum
Image: freepik.com