Indonesia's Financial Services Authority (OJK) has introduced adaptive and measured policies to strengthen the financing, venture capital, microfinance, and other financial services institutions (PVML) sector while maintaining the stability of the financial services industry (17/06).

The policies are aimed at responding to industry dynamics and developments in the national economy. OJK said the measures are implemented under its authority while adhering to principles of good governance, prudence, and sound corporate governance.

The regulator expects the policies to encourage PVML industry players to conduct business activities in a healthy, prudent, and sustainable manner amid growing industry needs and increasing business challenges.

Selective Policies Apply Based on Company Conditions

OJK said the differentiated policies do not apply generally and can only be granted following requests from individual companies.

The authority will assess each company's condition and its compliance with prevailing regulations before granting approval.

The policies are implemented selectively and in a measured manner by considering the condition of each company and the needs of industry development, while continuing to prioritize consumer protection, prudential principles, and financial sector stability.

Key Regulatory Adjustments Cover Ownership and Capital Requirements

Through decisions issued by members of OJK's Board of Commissioners, the authority has approved differentiated policies related to financing companies, infrastructure financing companies, venture capital companies, and information technology-based joint funding services.

One policy concerns foreign ownership limits to strengthen capital, facilitate business activities, and maintain industry growth. The measure is intended to strengthen the capital position of companies whose funding needs have not been fulfilled by local shareholders.

Companies are still required to adjust foreign ownership to 85% no later than three years after reporting ownership changes to OJK.

OJK also introduced flexibility regarding the minimum operating period for controlling shareholders or ultimate controlling shareholders in the form of legal entities before making investments. The policy supports capital strengthening from shareholders that have operated for less than two years but have shown a strong commitment to investing in companies.

Another policy allows adjustments to minimum paid-up capital requirements resulting from ownership changes through acquisitions. The measure is intended to support capital strengthening efforts by shareholders whose financial conditions are still developing.

OJK Provides Transition Period for BNPL Operators

OJK has granted a transition period for non-bank financial institutions other than commercial banks and financing companies that provide Buy Now Pay Later (BNPL) services.

Under the policy, these institutions are given until December 31, 2027, to transfer their portfolios and discontinue BNPL operations to provide legal certainty.

The regulator also introduced flexibility regarding certification requirements and formal education background requirements in fit and proper tests for key parties of pawnshop companies applying for business licenses under OJK Regulation No. 29 of 2025.

The policy simplifies initial licensing requirements by exempting formal education background requirements and allowing certification requirements to be fulfilled no later than one year after a business license is granted.

OJK also provided flexibility in reporting approvals, endorsements, or notifications from competent authorities regarding shareholders' resolutions on company dissolution. The measure is intended to provide legal certainty and simplify administrative processes related to the return of business licenses.

OJK Continues Strengthening PVML Supervision

OJK said it will continue strengthening regulation and supervision in the PVML sector through adaptive and measured approaches.

The authority aims to maintain a balance between industry development, prudential principles, consumer protection, and the stability of the national financial system.

PHOTO: SHUTTERSTOCK/WISNU PRIYONO

This article was created with AI assistance.

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