Key Points of Peer to Peer Lending (P2P)

by Aurora Nia


Legal Basis:

Financial Service Authority (“Otoritas Jasa Keuangan” “OJK”) Regulation No. 77/POJK.01/2016 about Money Loan Based on Information Technology Services.


Money Loan Based on Information Technology Services is a financial service to bridge the lender and borrower in order to pledge a loan agreement (in Rupiah currency) through an electronic system and using an Internet networking.

"Organiser" is a platform provider that bridges between lender and borrower in the P2P Lending business process.

"Borrower" is a person and/or legal entity which has debt due to the money loan because of Information Technology Service Agreement. Borrower shall originate and domicile in Indonesia. Borrower consists of:

  1. Individual citizens of Indonesia; or

  2. Indonesia legal entity.

"Lender" is a person, legal entity and/or business entity which have an accout reivable of the debt because of Information Technology Service Agreement. Lender could be an Indonesian or foreign citizens and consists of:

  1. Individual citizens of Indonesia;

  2. Individual foreign citizens;

  3. Indonesia or foreign legal entity;

  4. Indonesia or foreign business entity; and/or

  5. International institution.


What Financial Business Authority Regulation says about Peer to Peer:

  1. Restriction for foreign ownership of this money loan based on information technology services business.

  2. Article 3 Financial Service Authority Regulation No. 77/POJK.01/2016 stipulates that Peer to Peer lending business is partly open for foreign investment up to 85% of the shares holding.

  3. Foreigner shall only participate as a Lender but not allow registering as a Borrower. Another requirement to be followed by P2P Lending business Organizer is that they shall also be registered as an association member appointed by OJK.

  4. To conduct P2P Lending business, OJK requires capital ownership of at least IDR1.000.000.000,- (one billion Rupiah) at the time of registration. However, at the time of applying the license, the amount of capital should have risen to reach IDR2.500.000.000,- (two billion and five hundred million Rupiah). The value of this capital tends to be lighter than the previous drafted rule by OJK, stating that the minimum capital at the time of the registration is in the amount of IDR2.000.000.000,- (two billion Rupiah), and IDR5.000.000.000,- (five billion rupiah) when the license applied.

  5. OJK limits the maximum granting of loan funds in P2P Lending business for a maximum of IDR2.000.000.000,- (two billion Rupiah).

  6. Financial Service Authority Regulation No. 77/POJK.01/2016 does not specify the limit of interest allowed in P2P Lending business. In a previous drafted rule, OJK mentioned that the allowable interest rate is seven times the BI 7-day Repo Rate per year.

  7. In the P2P Lending business, an Organizer should not touch the borrowed funds from the lender to the borrower, and vice versa. They may only receive commissions from any loan transaction that occur on their platform. To ensure this OJK also requires P2P Lending Organizer to provide virtual accounts for each borrower. The lenders will then send loan funds to the virtual account.

  8. As for the repayment process, the P2P Lending Organizer shall provide a joint account as known as escrow account. The borrower shall send back the funds they borrowed to the account, and then be channelled to the Lender.

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