Impact of Online Loans on Community Economics: a Maqashid Sharia Perspective

Abstract

With the advancement of information and technology, various digital innovations have emerged, including peer-to-peer (P2P) lending, commonly known as online loans. These innovations aim to make human tasks more effective and efficient. However, in reality, there is a widespread misunderstanding of their purpose. For instance, online loans are often used for consumption, and there is a tendency toward commercialization or profit-seeking through high interest rates. This has led to many individuals falling into debt, especially those from lower-middle-class backgrounds and young people. This research employs a qualitative descriptive approach using library research or literature review, analyzing the benefits and harms of online loans through the lens of maqasid sharia (the objectives of Islamic law). The findings indicate that the harms of online loans outweigh the benefits. Therefore, individuals must fully understand their goals and potential impacts before engaging with online loan ecosystems. Additionally, regulatory bodies such as the Financial Services Authority (OJK) should emphasize that online loans provide funding for businesses rather than consumption, ultimately disrupting the flow of money.