In late December 2016, the Financial Service Authority
of Indonesia (OJK) issued a regulation on the peer-to-peer
lending business. The regulation affects peer-to-peer providers
of loan products operating via internet platforms.
Under the new regulation, the relevant peer-to-peer platform
provider needs to register its business with the OJK and obtain
a licence to operate as a qualified peer-to-peer platform
provider. This requirement also applies to entities already in
operation (including start-ups such as Modalku, Taralite,
Uangteman, and Tunaiku). These operational entities need to
register with the OJK before the end of June 2017.
These businesses are also subject to continuing reporting
obligations, confidentiality standards, and data protection
The maximum foreign investment is limited to 85% of the
entity's shares (either held directly or indirectly by the
investors). The minimum paid-in capital is IDR2.5 billion
The maximum loan amount that may be disbursed under the new
regulation is IDR2 billion per debtor. The OJK may adjust this
limit from time to time. The debtor (whether natural persons or
business entities) to whom the loan is disbursed must be
domiciled in Indonesia.
Under the regulation it is envisioned that the platform
provider's role will be limited to 'matching' interested
lenders with borrowers. In fact, the platform provider is
prohibited from acting as either a lender or borrower and from
issuing any guarantees or debt instruments. It is also expected
that under the regulation, the platform provider will enter
into agreements with interested lenders, documenting the terms
of the loan (including the desired interest rate, loan amount,
terms, and fees).
If and when a borrower is matched with a lender, under the
new regulation it is expected that a separate electronic
agreement will be entered into between the lender and the
borrower, setting out the terms of the loan.
The regulation was effective as of December 29 2016.
Oene Marseille and Emir Nurmansyah