Canada    FinTech Guide    Chapter 7    Indonesia


7. Loan Services / Factoring / Loan Broking / Finetrading
Indonesia  Indonesia

The emerging market of the business area “Loan Services, Factoring, Loan Broking and Finetrading” will help  borrowers who need money to conduct their business. Hence, eventually, it will increase the business climate and economic conditions in Indonesia. Following the issuance of the recent BI Regulations on Fintech near the end of 2017, it indicates that the regulator is starting to allow the growth of financial technology in area of “Loan Services, Factoring, Loan Broking and Finetrading through some assessment and certain procedures (as explained in “Legal affair” section).



Legal Affairs


Pursuant to Financial Services Authority Regulation No. 77/POJK.01/2016 regard-ing Information Technology-Based Lending Services (“POJK No. 77/2016“), any platform providing P2P services (i.e. service that arrange the needs of creditor to provide loan with the debtor that will receive the loan) shall be registered and li-censed in OJK. Under POJK No. 77/2016, any P2P provider shall be in the form of limited liability company or cooperative. After 1 (one) year registered as the P2P pro-vider, the P2P Provider shall apply for license to OJK. OJK wil give approval or rejec-tion toward the license application at the latest 20 (twenty) business days following the receipt of the complete abovementioned documents. Furthermore pursuant to BI Regulations on Fintech, should BI views the P2P opera-tor as doing the business in payment system fields, then the P2P operator shall register itself to BI as financial technology operator and follow the determined procedures i.e. registration, Regulatory Sandbox and licensing.

Please see detailed explanation on Part “1. Payment Service / Mobile Payment”, particularly on “Legal Affairs” part.

Limitation or Restriction:
P2P Provider is limited and/or prohibited to conduct the following matters: (1) ar-range a loan provision in the amount of more than IDR 2,000,000,000 (two billion Rupiah); (2) act as the creditor or the debtor; (3) provide security in any forms for the fulfillment of other party’s obligation; (4) issue notes; (5) give recommendation to the debtor or creditor; (6) publish fictitious and misleading information; (7) offer the ser-vice to the debtor, creditor or other parties through personal communication means without the approval from the debtor or creditor; (8) charge any fee toward the com-plaint raised by the debtor/creditor.

For a fintech company that wants to act as a loan creditor, then such company needs to apply a banking license. While for a fintech company that wants to act of broking loans or receivables or conduct factoring of loans, the company needs to obtain license as the finance company.

Capital Requirement:
The minimum paid-in capital of a financing company established as limited liability company is IDR 100 billion. For a financing company intending to establish a sharia business unit, the working capital of the business work unit must be separated from the company’s capital, and at minimum amount to IDR 25 billion. The cap on foreign investment in a form of limited liability company is set at 85% of the company’s paid-in capital.



Economic Conditions


Since the regulation for P2P provider has been regulated in Indonesia, there is a chance to make the market for P2P provider increase and will help Indonesian citizens to borrow the money from the lender for its business.



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)

Disclaimer:
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