International Journal of Engineering Business

and Social Science

Vol. 1 No. 04, April 2023, pages: 277-282

e-ISSN: 2980-4108, p-ISSN: 2980-4272

https://ijebss.ph/index.php/ijebss

277

are confused about finding sources of funding for both daily needs and installment payments that have already been

taken (Kurnia et al., 2021) (Budiyanti, 2019). Many of them have experienced salary adjustments and unilateral

deductions by companies. Even though this is not in accordance with the Employment Law no. 13 of 2003. The position

of workers is very weak in this regard, if they do not accept the deal, they can lose their jobs and the legal protection

for them is very weak(Sari et al., 2021). Even though many of their salaries are only to meet the minimum wage

standards. If their already small income is cut by only 20%-30%, they are forced to find other alternatives to meet their

needs.

This is what makes people trapped in illegal online loans (Kurnia et al., 2021). Online loans provide many

conveniences. For example, there is no need for convoluted processes such as filling out documents and personal d ata.

For some people, the convoluted administrative system makes them reluctant to apply for loans to conventional banks

In addition to the convoluted issue of documents, there are many disadvantages of conventional banks. For example,

conventional banks have images that are difficult to penetrate. For prospective debtors, this conventional bank has

already caused uncomfortable feelings. The prudential principle of conventional banks turns out to make debtors

reluctant to apply for credit there. In addition, the application of this prudential principle is applied so rigidly that when

the age of the prospective debtor is not suitable, it can make credit not accepted.

In online lending, the prudential principle is not applied rigidly because illegal online loans are not bound by

the rules of the financial services authority. This flexibility is then utilized by online loans. Even for the limit, it is

extraordinarily large. For comparison, some banks use systems such as the analytic hierarchy process (AHP) to

determine the amount of credit card limits (Alwi, Yulianti, & Nuraeni, 2019). This is a complex process that takes into

account mathematical as well as psychological factors. This means that even banks do not want their NPLs (Non

But the threat of online loans, especially illegal ones, is very dangerous. Illegal online lending is a modern

form of extortion as well as theft of personal data. Many people are negligent because they are tempted by the

convenience offered by these illegal online loans. Actually, even legal online loans cannot necessarily be considered

safe. The main problem is the unilateral determination of limits and also other conveniences that are contrary to the

prudential principle of high risk.

In this regard, the author decided to conduct juridical research on the dynamics of legal protection in the

community against online loans, especially when online loans were used as a solution during the Covid -19 pandemic.

The law that is in the spotlight in this case is Law no. 2 of 2020 which is specifically devoted to overcoming public

and national financial problems during the Covid-19 pandemic.

2. Materials and Methods

risk of online loans that are harmful to our society's financial system. This research also analyzes whether the

government has designed a legal system that allows our society to avoid high-risk online loans.

The limitations of this study are the Law related to online loans and the Law on Financial Policy Control which

was inaugurated during the Covid-19 pandemic. The impact studied is the result of legal products emerging from 2020-

2022 related to the covid 19 pandemic.

3. Results and Discussions

The law is a tool of engineering the behavior of society. This theory is a theory developed by Roose Pound and

widely applied by governments around the world. When a law is applied, the community will take certain actions that

are in accordance with the law (Djasmani, 2011). The application of this theory, for example, can be seen in the odd-

even regional regulation applied by the DKI Jakarta Government. Of course, the purpose of this rule is not to

even rule actually encourages people to buy second and third cars and forge car license plate numbers.

In this logical sense, we can see that the increase in online loans during the pandemic is also due to the rules made

by the government. Although the government certainly does not want to make people more intense in applying for

online loans, the rules made by the government contribute to encouraging changes in people's behavior.

For example, legal factors that make people switch to online loans are due to the PPKM (Enforcement of

especially economic problems (Mawar et al., 2021). Many community activities have stopped so that many people

lose their income and the number of poor people increases(Poverty Situation During the Pandemic | The SMERU

Research Institute, n.d.). Meanwhile, it can be said that this government did not set up a cash direct assistance scheme

like for example in the United States which provides a certain amount of money for some households. What happened

was that the distribution of cash assistance was carried out through the pre-employment card system. This is a form of

policy that between its design and function does not work well. Because, when direct assistance with this pre-

of daily life.

When we look at Law no. 2 of 2020, we can see that there is no scheme to back up the salaries of employees

affected by PPKM. Article 4, for example, talks about tax relief and also dispensation on tax liabilities. But this is not

so necessary when in reality the remaining income that goes to the community lives below the range of 20-30 percent

only. Then related to direct cash assistance in Article 5 is also difficult because there is a category of poor people.

What about the middle-class population, which of course cannot be included in the poor category, but is greatly affected

by its inclusion because of the PPKM and similar policies?

The problem of the absence of salary back-up from the government has made people see alternative options.

Usually, consumer behavior will choose the type of loan that he knows well because it causes a sense of security and

comfort. In several studies, for example, research conducted by Widjaja Gunawan related to public understanding of