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The Indonesian Financial Services Authority (OJK) is in the process of finalising a draft regulation regarding lending services based on information technology (Draft Fintech Lending Regulation). The preparation and finalisation of the Draft Fintech Lending Regulation, which is expected this year, is timely as it seeks to address an acknowledged gap in Indonesia’s current financial services regulatory framework, in an area (including peer-to-peer and other marketplace lending) where fast moving market developments, driven by new technologies and a surge in innovative online financial services, have currently overtaken the existing regulatory framework.
The Draft Fintech Lending Regulation is primarily focused on marketplace lending and fintech lending operators, and sets out requirements in relation to among others:
- Foreign ownership limits
- Registration and licensing
- Minimum capital requirements
- Origin of providers and recipients of loans
- Lending limits
- Maximum interest amounts
- Expertise required of fintech lending operators
- Risk mitigation measures
- Data centres and data protection requirements
- Certain prohibitions
While the Draft Fintech Lending Regulation is currently in draft form only, it does provide an indicative understanding of the key policy drivers underpinning the regulation and also some of the key concepts and provisions which may find their way into the final version.
Please click here for further details regarding the Draft Fintech Lending Regulation.