Middle-Class People Prefer Installments Than Saving

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The middle-class group in Indonesia who earns IDR 5 million and above per month reduces the proportion of spending on savings in July 2022 compared to June 2022. This is evident in the Bank Indonesia (BI) Consumer Survey. At the same time, the proportion of spending on installments and loans is increasing.

This is also done by the community with incomes ranging from Rp. 3.1 million – Rp. 4 million per month and Rp. 4.1 million – Rp. 5 million per month.

Based on the Consumer Survey (SK) issued by Bank Indonesia, the average portion of savings to income in the three categories decreased compared to June 2022.

“People who earn IDR 3.1 million – IDR 4 million per month on average, the portion of savings to income decreased from 17 percent to 16.4 percent in July 2022,” wrote Bank Indonesia as quoted in an official statement, Monday (8/8/2022).

Respondents earning IDR 4.1 million – IDR 5 million per month decreased from 18.1 percent to 17.8 percent and people with income above 5 million and above decreased from 19 percent in June 2022 to 17.8 percent as of July 2022.

Meanwhile, the increase in the portion of savings to income was recorded only for respondents with expenditure levels of Rp. 1 million – Rp. 2 million and Rp. 2.1 million – Rp. 3 million per month. They rose from 18 percent to 18.1 percent as of July 2022 and 16.8 percent to 17.3 percent as of July 2022, respectively.

For customers with an income of IDR 5 million and above, the survey also found that the proportion of respondents’ expenditure on consumption decreased from 70.3 percent in June to 65.8 percent in July 2022.

In July 2022, respondents increased the proportion of spending on loan installments. Monthly, the proportion of spending on loans and installments increased from 10.6 percent to 16.4 percent.

There are many reasons why people prefer to pay in installments rather than save. One of them is the convenience of making online installments.

From the beginning, the online installment application was designed to be simple and easy for everyone to access. This of course aims to provide comfort and convenience for its users.

In contrast to payment applications issued by banks, in general, these online installment applications apply several fair requirements. Just using the National Identity Card (KTP), people can submit an online installment application.

The application process is also very easy and fast. If someone have met the required requirements and filled in the data, then the submission can be done.

For information, the Consumer Survey from Bank Indonesia is a monthly survey conducted since October 1999.

Since January 2007 the survey was conducted on approximately 4,600 households as respondents (stratified random sampling) in 18 cities: Jakarta, Bandung, Bodebek, Semarang, Surabaya, Medan, Makassar, Bandar Lampung, Palembang, Banjarmasin, Padang, Pontianak, Samarinda, Manado , Denpasar, Mataram, Pangkal Pinang, Ambon and Banten. The index per city is calculated by the balance score method (net balance + 100) which shows that if the index is above 100 it means optimistic and below 100 means pessimistic.