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Peer to Peer Lending Service


At the end of the year 2016, the Financial Services Authority (“OJK”) released the Financial Services Authority Regulation Number 77 of 2016 concerning Information Technology-Based Lending Services or Peer to Peer Lending Platform (“POJK No. 77/ 2016”).

Applicability of POJK No. 77/2016

POJK No. 77/2016 is expected to support the growth of the Information Technology-Based Lending Services industry to support Financial technology Peer to Peer Lending platforms (“Peer To Peer Lending”), as new financing alternatives for communities that have yet to enjoy optimal services from conventional financial services industries, including banks, capital market, financing companies, and venture capital firms. Peer to Peer Lending are also expected to improve equilibrium and accelerate distribution of financing to Micro, Small and Medium Enterprises to various areas in Indonesia.

Regulated Matter

Pursuant to POJK No. 77/2016, there are several matters that regulated for Peer to Peer Lending, as follows:

1.Foreign Ownership Limitation

POJK No. 77/2016 regulates Peer to Peer Lending industry in terms of restrictions on foreign ownership of the industrial Peer to Peer Lending. This Regulation stated that foreign ownership for Peer to Peer Lending Company is limited to 85% of share ownership.

Beside the limitation, OJK gave permission for foreigners to participate and act as a lender or investor. However, on the other hand foreigners or foreign legal entity cannot act as borrowers only restricted to Indonesian citizen or Indonesian legal entity.

2.Capital for Peer to Peer Lending Company

Peer to Peer Lending Company must be

registered as a member appointed by OJK. At the time of registration, Peer to Peer Lending Company must own minimum capital of Rp.

Peer to Peer Lending Company also need to apply for licensing from OJK and when applied for licensing Peer to Peer Lending Company must owned capital in total of Rp.2.500.000.000

3.Limitation of Loan and Interest

OJK regulate the limitation of nominal amount that can be lent is Rp. maximum. In connection with interest, POJK No. 77/2016 does not state the restrictions on interest. Peer to Peer Lend Company will provide the interest that offered by Lenders so Borrowers will be able to consider fairness of the interest.

4. Virtual Account and Escrow Account

On Peer to Peer Lending Business, a company not allowed to or and take any loan that lend to Borrower from Lender, or in otherwise.

To ensure that matter, OJK obliged the Peer to Peer Lending Company to provide Virtual Account to every borrower and Lenders will send the loan into Virtual Account.

For debt repayment, Peer to Peer Lending Company will providing Escrow Account, where borrower shall repay the loan into Escrow Account and afterward forwarded to the lenders.

As a conclusion, with this regulation OJK will always supervise the Peer to Peer Lending Regulation and all the company activity that engaged in that field.

If you have any questions relating to this article, please contact:

Maylanie N. Priscilla
Partner, Hermawan Juniarto
Tel +62 21 2995 9057

Posted in News and Media on Jan 23, 2017