The Indonesian Financial Services Authority (OJK) is in the process of finalising a draft regulation regarding lending services based on information technology (Draft Fintech Lending Regulation). The preparation and finalisation of the Draft Fintech Lending Regulation, which is expected this year, is timely as it seeks to address an acknowledged gap in Indonesia’s current financial services regulatory framework, in an area (including peer-to-peer and other marketplace lending) where fast moving market developments, driven by new technologies and a surge in innovative online financial services, have currently overtaken the existing regulatory framework.
The Draft Fintech Lending Regulation is the most developed articulation we have yet seen of a draft set of basic rules for the conduct of marketplace lending in Indonesia. The draft regulation seeks to balance the requirements of applying prudential principles (including risk management and consumer protection rules) to regulate marketplace lending, versus creating rules which are too restrictive such that they inhibit the proper development of a young industry. It remains to be seen whether the draft regulation will strike the optimal balance in practice, as much will depend on the details of the implementation policies.
To read more from David Dawborn, Vik Tang, Sakurayuki, Mark Robinson and Jy Millis, from Herbert Smith Freehills in association with Hiswara Bunjamin & Tandjung in Indonesia, click here.
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