Policy

Jakarta,  31 December 2024 – Indonesia Financial Services Authority (OJK) continues to promote the growth of the financial services industry as well as consumer and community protection through the strengthening of regulations, particularly related to Technology-Based Crowdfunding Services (LPBBTI) or Online Loans (Pindar) and Buy Now Pay Later (BNPL) for Financing Companies.

Regulations on Economic Benefit Limits for LPBBTI

OJK Circular Letter No. 19/SEOJK.05/2023 concerning the Implementation of Peer-to-Peer Lending Services (SEOJK 19/2023) regulates, among other things, that the determination of the maximum economic benefit limits may be periodically evaluated according to policies established by OJK, taking into account economic conditions and developments in the P2P lending industry.

Considering the economic conditions that still require growth in financing distribution, including from the P2P lending sector, the industry's need for strong funding support from Lenders, the goal of increasing financial access for communities underserved by non-P2P industries, the availability of sustainable funding for financing productive sectors and MSMEs as outlined in the 2023–2028 Roadmap for P2P Lending Development and Strengthening, and the need to enhance the financial performance and efficiency of P2P operators, starting 1 January 2025, the maximum daily economic benefit limits for P2P Lending will be adjusted as follows:

Strengthening Regulations Regarding LPBBTI

In order to improve the quality of funding, create a healthy, efficient, and sustainable industry ecosystem, protect consumers/society, and minimize potential legal and reputational risks for P2P lending industry players, it is deemed necessary to strengthen regulations on P2P lending, which include the following:

• The minimum age for Lenders and Borrowers is 18 (eighteen) years or married, and the minimum monthly income for P2P Borrowers is IDR 3,000,000 (three million rupiahs). The obligation to meet the requirements/criteria for Lenders and Borrowers will be effective for the acquisition of new Lenders and Borrowers and/or extensions, no later than January 1, 2027.
• Lenders will be categorized into Professional Lenders and Non-professional Lenders.

1. Professional Lenders consist of:
   • Financial institutions;
   • Indonesian/foreign legal entities;
   • Domestic individuals (residents) with an income above IDR 500,000,000 (five hundred million rupiahs) per year, with a maximum investment of 20% (twenty percent) of their total annual income in one P2P lending operator;
   • Foreign individuals (non-residents);
   • Central government, regional government, or foreign government; and/or
   • Multilateral organizations.
2. Non-professional Lenders are those other than those listed in 1) above, and domestic individuals (residents) with an income equal to or below IDR 500,000,000 (five hundred million rupiahs) per year, with a maximum investment of 10% (ten percent) of their total annual income in one P2P lending operator.

The outstanding funding amount by Non-professional Lenders, as stated in item 2), compared to the total nominal outstanding funding, is capped at 20% (twenty percent), which will apply no later than  1 January 2028.

Regarding the strengthening of regulations on P2P lending mentioned above, P2P operators are required to take preparatory steps and risk mitigation measures to avoid negative impacts on the performance of P2P operators.

Strengthening Regulations on Buy Now Pay Later (BNPL) Scheme for Financing Companies

In addition, the OJK is currently preparing regulations related to the Buy Now Pay Later (BNPL) scheme for Financing Companies (PP BNPL). This is part of the effort to strengthen consumer protection, anticipate potential debt traps for BNPL users who lack sufficient financial literacy to use financial products and services, and support the development and strengthening of the Financing Company industry.

Key points of these regulations include, BNPL financing will only be provided to customers/debtors who are at least 18 (eighteen) years old or married, with a minimum income of IDR 3,000,000 (three million rupiahs) per month. The requirement to meet these customer/debtor criteria will be effective for the acquisition of new customers/debtors and/or extensions of BNPL financing, no later than 1 January 2027.

Furthermore, Financing Companies operating BNPL activities must notify customers/debtors about the need for caution in using BNPL, including recording transactions in the Financial Information Service System (SLIK).

The OJK may review these regulations, considering economic conditions, financial system stability, and the development of the Financial Companies of BNPL.