Indonesia issues new fintech law for lending firms
Let the lender beware
The financial services authority (Otoritas Jasa Keuangan or OJK) of Indonesia has issued a new law affecting all fintech P2P lending firms in the country.
The new law, applicable to all such business units operating in or intending to set-up in Indonesia, is aimed at protecting the consumer.
The new law stipulates that such business units must be registered and have the right licence to continue to do business.
For registration, the OJK requires such businesses have a minimum capital of IDR 1 billion ($75,000). To be able to issue a business licence, the authority needs companies to add another IDR 2.5 billion ($188,000) to their capital.
Foreign ownership is limited to 85%. So this adds a layer of complexity for those looking to set up in Indonesia as they have to find a local partner.
By Soumik Roy, Banking Technology’s editorial contributor.
