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OJK strengthens fintech P2P lending operations in Indonesia

The Financial Services Authority (OJK), Indonesia, has issued a regulation pertaining to information technology-based co-financing services (POJK LPBBTI/ Fintech P2P lending).

This regulation was issued to develop the financial industry in order to encourage the growth of alternative financing and to facilitate and improve access to funding for the public and biseness players through an information technology-based funding service.

This POJK is also a refinement of the Financial Services Authority Regulation Number 77/POJK.01/2016 concerning Information Technology-Based Borrowing-Lending Services (POJK 77/2016) in order to accommodate faster and more beneficial industrial development while also providing optimal consumer protection arrangements.

Some of the substance of the regulatory improvements are as follows: The LPPBTI operator must be established in the form of a limited liability company with a paid-up capital at the time of establishment of at least Rupiah 25 billion. The maximum limit for funding by each lender and its affiliates is a maximum of 25% of the final funding position at the end of the month. The operator is required to submit funding transaction data to the OJK lending fintech data center by integrating the operator’s electronic system into the fintech lending data center. The operator must at all times have equity of at least Rupiah 12.500 billion. Operators are required to have an internal audit unit that is run by at least one HR person.

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