Digitally Trapped: Gender, Predatory Inclusion, and the New Debt Cycle in Indonesia's Informal Economy

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Abstract
The expansion of financial technology promises greater financial inclusion, yet for many female street vendors (pedagang kaki lima/PKL) in Indonesia, it has instead created a form of digital entrapment. This study employed a qualitative, retrospective case study methodology to investigate the lived experiences of 10 purposively selected women who had engaged with online lending services (pinjol). Drawing on Jan van Dijk’s four-level digital divide framework, we conducted a thematic analysis of in-depth interview data to assess their levels of vulnerability. Findings indicate that the decision to use online loans was not driven by well-developed business strategies but rather by persuasive advertising and immediate personal needs. Participants frequently misinterpreted the presence of OJK (Financial Services Authority) logo as a universal guarantee of safety, while lacking the skills to critically evaluate interest rates, loan conditions, and data-privacy risks. The perceived affordability and accessibility of these platforms came at a significant cost, particularly in terms of personal data exposure, which further exacerbated participants’ financial and emotional vulnerabilities. Rather than fostering financial independence, online lending entrenched a “gali lubang tutup lubang” (robbing Peter to pay Paul) cycle of indebtedness that undermined their livelihoods, mental well-being, and social environments. This study shows that for women working in the informal sector, fintech’s promise of inclusion often masks structural dynamics that reproduce exploitation and deepen precarity in developing-country contexts.

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