Lecturers and Students of FMIPA UI Educate Teachers and Students of SMAN 4 Depok About the Importance of Financial Literacy and Calculating Loan Interest

In the digital era like today, everything feels easy to do to meet the needs of life. Likewise, regarding capital, if previously it was very difficult for people to get loans because of complicated administration, now getting loans has become easier and faster. One thing that is considered easy by some people is the existence of loan service providers through digital-based applications or what is popularly known as loans online (pinjol). Pinjol is here to offer easy, fast, and of course low-interest loan terms. It is no wonder that pinjol is considered by the public as a tempting solution to overcome problems related to funds or capital without taking into account hidden risks.

The trend of online loans has become popular in recent years. Even in statistical data released from the official website of the Financial Services Authority (OJK), it states that the OJK Fintech P2P Lending Statistics (joint funding fintech) in December 2022 showed that 62% of joint funding fintech accounts were owned by customers aged 19-34 years. This means that Gen Z and Millennials have more debt than other generations. The trigger is none other than the technological advances mastered by Gen Z and Millennials and the profile of the two generations as productive age groups who work and have income.

Unfortunately, this technological advance is not balanced by an increase in financial literacy. So that this generation is easily a victim of irresponsible online loans. The easy administrative process mode and low loan interest rates at the beginning of the loan, to replicating names similar to legal online loans and falsifying the OJK logo can also be done to trick victims who are careless so that victims simply believe it because it is difficult to distinguish between legal and illegal online loans.

In response to these facts, a number of lecturers and students from the Actuarial Science Study Program, Faculty of Mathematics and Natural Sciences, University of Indonesia (FMIPA UI) held a community service activity through a workshop entitled "Loan Interest Education to Improve Financial Literacy" for teachers and students of SMAN 4 Depok City, to provide financial-based insights on the importance of carefully assessing the risks of online loans before deciding to get involved.

"This event is a forum for participants to understand how important it is to carefully assess loan offers before making decisions by improving financial literacy. We dedicate this workshop to increasing awareness of the importance of financial literacy among teachers and students," said Arman Haqqi Anna Zili, S.Si., M.Si., as the team leader.

A total of 48 participants consisting of teachers and students were involved in the activity which was held directly at SMAN 4, Depok, on Saturday (15/7/2023). They were given education related to calculating interest rates, payment amounts, and loan periods using formulas in the Microsoft Excel application by facilitators who are lecturers from the Actuarial Science study program, namely Dr. Fevi Novkaniza, S.Si., M.Si., Dr. Dian Lestari, D.E.A., Dr. rer. nat. Hendri Murfi, S.Si., M.Kom., Dr. Dra. Yekti Widyaningsih, M.Si., Mila Novita, S.Si., M.Si., Suci Fratama Sari, S.Si., M.Si., Sindy Devila, S.Si., M.Si., and Dra. Ida Fithriani, M.Si..

Meanwhile, the workshop material was delivered by Rahmat Al Kafi, S.Si., M.Si. In his material, he explained how to identify the characteristics of fraudulent modes or traps carried out by online lenders. These characteristics can be seen from the amount of interest offered by online lenders. According to him, legal online loans certainly meet the requirements and provisions set by the Financial Services Authority (OJK), and are guaranteed to have obtained permits and are supervised by OJK.

"The interest on online loans must be in accordance with that permitted by OJK, if it exceeds the provisions, the legality of the online loan needs to be questioned," said Rahmat.

Furthermore, he explained the types of loan interest with examples such as simple interest and compound interest complete with examples of calculations, to an understanding of the effective interest rate, nominal, and illustrations.

Other materials that are also presented are about annuities starting from the definition of annuities, types of annuities and examples. The materials are also presented in several real case examples to help participants. workshop in understanding the materials more deeply.

"One example of a case studied here is when a debtor borrows a certain amount of funds from a particular loan service provider. The facilitator team helps participants to calculate the monthly installments that the debtor needs to pay to the relevant service provider, namely by using the PMT function in Excel. In addition, in another case example, we also introduce the NPER function in Excel which can help participants calculate the ideal loan tenor," said Rahmat.

Participants are also educated on how to read and understand the terms and conditions of the loan in full. To sharpen analytical skills and deepen participants' understanding of the dangers of online loans that may occur, the team also provides real case examples that show a picture of the negative impacts of online loans with high interest, especially when the payment period arrives

"This activity marks a step forward in efforts to increase financial awareness among students and teachers, so that it is hoped that more teenagers and academics will be able to distinguish between investment offers or financial service products in order to avoid high-interest loan traps, and be smart in making financial decisions in order to manage finances effectively," he added.

News source : https://sci.ui.ac.id/