OJK Strengthens Risk Management for Online Lending platforms
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Jakarta – Indonesia‘s financial Services Authority (OJK) is mandating stricter risk management practices for the Information Technology-Based Funding Service Industry (LPBBTI), also known as online lending platforms. The move aims to safeguard funders and decrease the number of borrowers falling behind on payments.
Enhanced Scrutiny for Online Loan Approvals
The OJK’s directive includes reinforcing the principles of repayment capacity assessment and electronic Know Your Customer (e-KYC) protocols as fundamental criteria for approving funding requests. This enhanced scrutiny is expected to mitigate risks for investors, now referred to as ‘pindar,’ and reduce the incidence of overdue payments among borrowers.
M. Ismail Riyadi, Acting Head of the Department of Literacy, Financial Inclusion and Dialog at OJK, stated that this risk management reinforcement aligns with the provisions outlined in SEOJK Number 19/SEOJK.06/2023 concerning the Implementation of Information technology-Based Funding services. Riyadi explained in a statement on Wednesday, June 18, 2025, that these regulations require online lending platforms to conduct thorough credit scoring assessments and ensure the loan amount aligns with the borrower’s financial capacity.
Did You Know? The delinquency rate for fintech lending in Indonesia reached 3.04% in March 2024, prompting increased regulatory scrutiny [1].
furthermore, online lending platforms are now prohibited from providing funding to borrowers already receiving financing from three other platforms, including their own. This measure aims to prevent borrowers from becoming over-leveraged and reduces the risk of default.
Public Advisory on Responsible borrowing
the OJK urges the public to exercise caution and make informed decisions when utilizing online loan facilities. This includes carefully evaluating their needs and ability to repay the loan to avoid falling victim to illegal online lenders and unsustainable debt cycles.
Pro Tip: before taking out an online loan, compare interest rates and fees from multiple lenders to ensure you’re getting the best possible terms.
SLIK Reporting Requirement
As a further step to strengthen risk management, the OJK has mandated that, starting July 31, 2025, all online lending platforms must report to the Financial Information Service System (SLIK), as stipulated in Financial Services Authority Regulation (POJK) Number 11 of 2024. This SLIK data will provide financial service institutions with valuable information to assess the creditworthiness of potential borrowers.
Riyadi believes that these measures will foster a healthier, more transparent, and accountable online lending industry, ultimately benefiting the community by providing access to productive financing options.
The OJK has made it clear that any violations of these regulations will result in strict enforcement actions in accordance with applicable laws.
| Regulation | Effective Date | Requirement |
|---|---|---|
| SEOJK Number 19/SEOJK.06/2023 | Current | Credit scoring and borrower capacity assessment |
| POJK Number 11 of 2024 | July 31, 2025 | SLIK reporting for online lending platforms |
The Future of Online Lending in Indonesia
These regulatory changes reflect a growing emphasis on responsible lending practices within Indonesia’s rapidly expanding fintech sector. By prioritizing risk management and consumer protection, the OJK aims to create a sustainable ecosystem that benefits both lenders and borrowers.
What are your thoughts on the OJK’s new regulations for online lending platforms? How do you think these changes will impact borrowers and lenders in Indonesia?
Online Lending: A Brief History
Peer-to-peer (P2P) lending, the foundation of manny online lending platforms, emerged as an alternative to traditional banking, connecting borrowers directly with investors.The rise of fintech and mobile technology has fueled the growth of online lending in Indonesia, providing access to credit for individuals and small businesses underserved by traditional financial institutions. However, this rapid growth has also raised concerns about predatory lending practices and the potential for unsustainable debt accumulation.
FAQ
- What is the role of OJK in regulating online loans?
- The OJK is responsible for supervising and regulating financial service activities in the financial services sector, including online lending platforms, to ensure stability, transparency, and consumer protection.
- How can I report an illegal online loan platform?
- You can report illegal online lending platforms to the OJK through their official website or hotline.
- What are the risks of taking out an online loan?
- Risks include high interest rates, hidden fees, aggressive collection practices, and the potential for data privacy breaches.
Disclaimer: This article provides general information and should not be considered financial advice. Consult with a qualified financial advisor before making any decisions related to online loans.
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