The fintech industry in Indonesia, particularly peer-to-peer (P2P) lending, is grappling with stricter regulations set by the Financial Services Authority (OJK). Based on information from Bisnis.com, these include a minimum equity requirement, which will rise from IDR 7.5 billion in 2024 to IDR 12.5 billion by June 2025.

According to Nailul Huda, Director of Economics at Celios, many P2P lending operators may find it challenging to meet this threshold. As of December 2024, 11 platforms still had not met the IDR 7.5 billion equity standard, raising concerns about their ability to achieve compliance by the next deadline.

“The current funding climate for digital companies is challenging,” said Huda. “With limited funding sources, it will be difficult for some platforms to meet these equity requirements unless they consolidate, perhaps through mergers or partnerships with other digital platforms.”

The ongoing "tech winter," characterized by reduced investment in tech companies, has further exacerbated the situation. Huda attributes this downturn to the U.S. Federal Reserve maintaining high interest rates, which have increased the cost of investments globally. This, in turn, has created a significant obstacle for P2P lending platforms seeking capital.

Huda also suggested that OJK reconsider the timeline for implementing the new equity requirements outlined in POJK Number 10 of 2022. “Given the ongoing funding crisis in the digital sector, should the IDR 12.5 billion requirement be postponed? Or can OJK provide alternative solutions, such as encouraging platforms to consolidate with digital ecosystems or financial institutions?”

However, consolidation and mergers may not be straightforward solutions. Under POJK 10/2022, a single company is prohibited from operating more than one P2P lending platform. This restriction complicates horizontal mergers unless the platforms target distinctly different markets or services, such as combining P2P lending with Buy Now, Pay Later (BNPL) offerings.

Huda argued that this regulation is logical, as duplicating platforms under one company can lead to internal competition. He cited examples in traditional banking where different brands, like BCA and its Blu Digital arm, cater to unique market segments.

SOURCE: BISNISCOM | PHOTO: FREEPIK