Indonesia’s financial services regulator, the Otoritas Jasa Keuangan (OJK), has announced plans to limit the participation of non-professional individual lenders in the growing fintech peer-to-peer (P2P) lending industry. This move is designed to protect both lenders and consumers while promoting more professional involvement in the sector.

Agusman, the Head of OJK's Financial Supervisory Board for Financing Institutions, Venture Capital, Microfinance, and Other Financial Services, explained that restricting non-professional lenders would provide greater opportunities for professional lenders. "Professional lenders are more likely to understand the risks and benefits of P2P lending transactions," he stated. The OJK is currently conducting a study to prepare for this regulatory change.

This decision comes at a time when the P2P lending industry has seen significant growth, with the involvement of more banks. As of September 2024, the value of loans disbursed by both domestic and foreign banking lenders reached IDR 42.37 trillion, an increase of 55.26% from the previous year. Agusman noted that this growing involvement highlights the increasing synergy between the banking sector and P2P lending platforms, which benefits both industries.

Furthermore, the OJK's regulation aligns with the 2022 Financial Services Authority (POJK) rule, which allows financial institutions (LJK) to control up to 75% of the outstanding funding on P2P lending platforms. This ensures greater stability and oversight within the industry, as financial institutions play an essential role in sustaining the growth of P2P lending in Indonesia.

As of October 2024, OJK data revealed that the total financing outstanding in the P2P lending sector had reached IDR 75.02 trillion, reflecting a 29.23% year-on-year growth. This significant increase underscores the importance of regulatory measures to maintain a balanced, sustainable environment for fintech growth.

The OJK’s steps to restrict non-professional lenders will likely reshape the landscape of Indonesia’s P2P lending industry, making it more attractive to professional lenders and institutional players. This move could also prompt increased collaboration between fintech platforms and established financial institutions, ensuring the long-term viability of the sector.

KONTAN