Canada    FinTech Guide    Chapter 12    Indonesia

12. Online-Pawning
Indonesia  Indonesia

Considering the function of online pawning services in Indonesia will help the lender and borrower to conduct its activity, it is expected that this business may expand in the future.

Legal Affairs

If a fintech company wants to provide online pawning services in Indonesia (in Indonesia is called as “Gadai”), it needs to obtain license from OJK, as regulated under OJK Regulation No. 31/POJK.05/2016 regarding Pledge Business Activity (“POJK No. 31/2016”).

Pursuant to POJK No. 31/2016, any pawning institution shall be in the form of limited liability company or cooperative. The minimal issued capital for such institution shall be IDR 500,000,000 (five hundred million Rupiah) for district/city area or IDR 2,500,000,000 (two billion five hundred million Rupiah) for province area.

The minimum paid-up capital for the pawning institution shall be IDR 500,000,000 for the scope of district/city; or IDR 2,500,000,000 for the scope of provincial area.

Economic Conditions

In general, the market for online pawning is relatively moderate, considering that Indonesian people are still conventional and prefer to go directly to the pawning institution and transact face-to-face.


Although this type of business has been regulated by OJK, many companies undertaking this business are reluctant to fulfill the requirement in POJK 31/2016 and administer the license. Pursuant to the news in April 2017, among 1,000 existing pawning institutions, only 7 has obtained license from OJK.

Contributing Authors

Armand Yapsunto Muharamsyah & Partners (AYMP)

Arie Armand
Jakarta, Indonesia

Richard Yapsunto
Jakarta, Indonesia

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Chapter Index:

1. Payment Services / Mobile Payment

2. Asset and Portfolio Management

3. Consulting and Broking Services / Robo-advisory / Auto-trading

4. Trading Platforms / Social Trading Platforms / Signal Following

5. Crowdfunding / Crowdinvesting / Crowdlending

6. Virtual Currency - Bitcoin

7. Loan Services / Factoring / Loan Broking / Finetrading

8. Online Banking Services

9. Analytics and Research / Data Management / Risk Management

10. Accounting

11. Identification

12. Online-pawning

13. InsurTech

14. RegTech

15. Initial Coin Offerings (ICOs)

The information in this guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

Publication Date: 1 May 2018