KUALA LUMPUR, July 6 — With more international acts turning up in Indonesia to perform, locals are turning to fintech lending to get funds for tickets.

The Indonesian Financial Services Authority (FSA) said outstanding loans from digital platforms have reached 51.5 trillion rupiah (RM15.9 billion) in May, up 28 per cent from a year ago, reminding borrowers not to borrow beyond their means, Bloomberg reported.

"Most of those who have difficulty paying off loans usually borrow for consumer needs, for example, buying new gadgets, recreation, fashion, and even recently to buy concert tickets,” FSA commissioner Friderica Widyasari Dewi reportedly told a briefing.

As smartphone penetration outpaces the growth of banking access, Internet-based financial services have become an alternative avenue to conventional lenders to help small businesses get funds to expand in the country.

However, only about 40 per cent of the funds go to small businesses and more than half of outstanding loans are concentrated in Jakarta and the neighbouring West Java.

The ratio of bad online loans have increased to 3.36 per cent in May, against 2.78 per cent at the end of last year, although it is still below the 5 per cent threshold set by FSA.

"We continue to advise people to understand the risks of online lending, especially the dangers of illegal fintech,” Dewi said.