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On 28 November 2016, we issued a bulletin commenting on a draft regulation circulated by the Indonesian Financial Services Authority (locally known as the “OJK”) relating to Information Technology-Based Lending Services (please click here for our previous bulletin).
On 29 December 2016, OJK issued the final version of OJK Regulation No. 77/POJK.01/2016 regarding Information Technology-Based Lending Services (“IT-Based Lending Regulation”). The IT-Based Lending Regulation 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 have currently overtaken the existing regulatory framework.
The IT-Based Lending Regulation is the most developed articulation we have seen of a set of basic rules for the conduct of marketplace lending in Indonesia, although the regulation provides that further details regarding many detailed operational aspects will be regulated in further OJK Circular Letters. The regulation seeks to balance the requirements of applying prudential principles (including risk management and consumer protection rules) to regulate marketplace lending with rules which are so restrictive that they inhibit the development of a young industry. It remains to be seen whether the regulation will strike the optimal balance in practice, as much will depend on the details of the implementation policies.
Please click here for further details regarding the final version of the IT-Based Lending Regulation.