In July 2022, Indonesia’s Financial Services Authority or OJK (Otoritas Jasa Keuangan) introduced a new regulation on peer-to-peer or P2P lending designed to both encourage optimal and healthy growth of the P2P lending industry and accommodate OJK’s needs for effective and efficient supervision.
Previously, P2P lending in Indonesia was primarily regulated under OJK Regulation No. 77/POJK.01/2016 (“Previous Regulation“). Many view the Previous Regulation as inadequate, especially in light of the rapid growth of P2P lending in Indonesia, which unfortunately also led to an increase in the number of illegal P2P lenders. As of October 2021, OJK had identified more than 100 illegal digital P2P lenders.
The new regulation, OJK Regulation No. 10/POJK.05/2022 on Information Technology-Based Collective Financing Services (“New Regulation“), enacted on 4 July 2022, introduced several new concepts in the P2P lending sector, enhanced the provisions on OJK’s supervision through market conduct, and revoked several provisions in the Previous Regulation on the lending limit, paid-up capital and equity minimum requirements, and licensing process. Despite revoking these provisions in the Previous Regulation, clients should note that the implementing regulation for the Previous Regulation, namely OJK Circular Letter No. 18/SEOJK.02/2017, remains valid.
This Update takes a closer look at the changes introduced by the New Regulation.
For more information, click here to read the full Legal Update.
