INDONESIA Law and Practice Contributed by: Emir Nurmansyah, Monic N. Devina, D. Meitiara P. Bakrie and Ruth A. Mendrofa, ABNR Counsellors at Law
ABNR Counsellors at Law Graha CIMB Niaga, 24th Floor Jl Jenderal Sudirman Kav 58 Jakarta – 12190 Indonesia
Tel: +62 21 250 5125 Fax: +62 21 250 5001 Email: info@abnrlaw.com
1. Fintech Market 1.1 Evolution of the Fintech Market OJK Reg, 40 The Indonesian Financial Services Authority ( Otoritas Jasa Keuangan , or OJK) issued OJK Regulation No 40 of 2024 on Information Tech - nology-based Joint Funding Services ( “OJK Reg, 40” ) on 27 December 2024. OJK Reg, 40 has become the main regulation on peer-to-peer (P2P) lending services, replacing OJK Regula - tion No 10/POJK.05/2022 on Information Tech - nology-Based Joint Funding Services ( “OJK Reg, 10” ). OJK Reg, 40 sets forth more comprehensive provisions compared with OJK Reg, 10 and has made some major changes, including: • permission to establish P2P lending compa - nies in the form of co-operatives ( koperasi ); • that the shares in P2P lending companies may now be held not only by Indonesian citizens, Indonesian legal entities, foreign legal entities, and/or foreign citizens but also by the Republic of Indonesia and/or regional government authorities; • that the selection of a mandatory partner for foreign shareholders has been broadened to
include not only Indonesian citizens and/or Indonesian legal entities but also the central and/or regional government; • that the existing 85% limitation on direct and indirect foreign ownership in a P2P lending company remains in effect until the govern - ment issues a specific regulation modifying this limitation; • that licensed P2P lending companies with for - eign ownership exceeding the prescribed limit prior to and up to the enactment of OJK 40 are exempt from currently applicable owner - ship restrictions, provided there is no change in ownership; • the change of generally applicable funding limit from IDR2 billion to maximum consump - tion funding limit of IDR2 billion and maximum productive funding limit of IDR5 billion; • that P2P lending companies wishing to engage in productive funding of between IDR2 billion IDR5 billion shall ensure that their non-performing loans do not exceed 5% over the previous six months, and must not cur - rently be subject to any OJK sanctions in the form of business restrictions or suspensions; • that P2P lending companies shall maintain a financial soundness rank of at least compos - ite rating of 3, which is assessed based on (i)
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