Peer-to-peer lending platforms, offering loans ranging from as little as few thousand rupiah to several million rupiah, have so far been welcomed by Indonesia. Although Southeast Asia’s biggest economy, Indonesia is a country where tens of millions of people have little or no access to bank credit. This gap in loan needs and credit is fertile ground for the popularity of P2P lending platforms.
On December 2016, the Financial Services Authority (“OJK”) enacted OJK Regulation No. 77/POJK.01/2016 regarding IT Based Lending Services (“POJK 77/2016”). This POJK 77 2016 introduces various guidelines, obligations and restrictions in an attempt to establish a framework for P2P businesses.
A P2P Lending Service is defined as financial services provided via an online platform that matches lenders and borrowers to facilitate entry into loan arrangements by an electronic system through the internet facility.1 Also, a P2P Lending Service Provider (“Provider”) is an Indonesian legal entity that provides, maintains and operates the P2P Lending Services.2
Under POJK 77/2016, Providers specifically exclude other financial institute on. A Legal entity as mentioned above for the purposes of a Provider shall either be a limited liability company (“PT”) or cooperative (“Koperasi”).3
POJK 77/2016, stipulates 2 (two) stages before a Provider can do business. First, the registration stage and second the business license stage.4 The registration certificate and business licenses are issued by OJK. Any PT Provider who wishes to obtain a registration certificate must have a paid-up capital at least IDR 1 Billion, and must increase its paid up capital to at least IDR 2.5 Billion by the time the PT Provider applies for a business license. A Koperasi Provider is subject to the same capital requirements for its equity at the registration and business license stage.5
77/2017 stipulates also requires specific qualifications for the employees and management of the Provider. Employees must have IT background or expertise and at least one director and commissioner must have a minimum 1 (one) year’s expertise and experience in the financial services industry.6 A further specific pre-qualification is for data center and disaster recovery center to be located in Indonesia.7
1. POJK 77/2016, Article 1 paragraph 3; 2. Ibid, Article 1 paragraph 6; 3. Ibid, Article 2 paragraph (2); 4. Ibid, Article 7; 5. Ibid, Article 4; 6. Ibid, Article 14; 7. Ibid, Article 25.