Regulatory Overhaul for P2P Lending Business Finally Issued

The Financial Service Authority (“OJK”) recently issued OJK Regulation No. 10/POJK.05/2022 dated July 4, 2022 on Information Technology Based Collective Financing Services (“POJK 10/2022”). POJK 10/2022 revoked the previous regulation, namely OJK Regulation No. 77/POJK.01/2016 of 2016 dated December 29, 2016 on Information Technology-based Lending Services (“POJK 77/2016”), which was originally introduced to quickly response to the then-growing Peer-to-Peer Lending (“P2P Lending”) industry. Now, due to increasingly complex development of the P2P Lending industry, a highly comprehensive regulatory framework is needed to safeguard the industry.

Since its inception, the P2P Lending industry in Indonesia saw remarkable growth, with factors such as digital revolution, public interest in new financial technologies and a huge potential market, all contributing to the industry’s upward momentum. However, the expedited growth of the P2P Lending industry also gave rise to its fair shares of issues, such as poor industry practices (i.e., debt collection, data protection, exorbitant interest rates) and more notably, a pervasive growth in illegal P2P Lending activities.

Over the years, the OJK has been committed to improving the P2P Lending ecosystem, closely monitoring its players and cracking down on illegal P2P Lending companies. To this end, the OJK has even enacted a moratorium on the issuance of new P2P Lending licenses, to ensure that a more mature legal framework is in place before further growth of the industry.

POJK 10/2022 represents a culmination of the OJK’s efforts to improve the P2P Lending sector. Provisions under this new regulation prove to be far more extensive compared to the previous regime, governing aspects of the industry that POJK 77/2016 was previously silent on. Additionally, POJK 10/2022 also codifies some of the more essential provisions and policies previously scattered under the OJK’s derivative regulations under one legal product. All in all, the issuance of POJK 10/2022 imposes more stringent standards on the P2P Lending industry as a whole. Although POJK 10/2022 provides a much-needed governance to the P2P Lending industry, the comprehensive set of rules and requirements also invites more questions and issues in regard to the implementation of the newly introduced provisions.

Please see below for an overview of POJK 10/2022.

  • Revamping of the Licensing Regime

Under the previous regime of POJK 77/2016, the entry policy for P2P Lending business required a P2P Lending Provider (“Provider”) candidate to register first before applying for a business license (at the latest, 1 year after being registered).

Back in 2016, P2P lending was a completely new industry in Indonesia. Despite that, the business had already attracted many players. POJK 77/2016 (along with its registration-licensing regime), to some extent, was intended to provide an interim governance to nurture the development of the industry while at the same time safeguarding its operation in Indonesia.

Now, similar to other more mature financial services, the new POJK 10/2022 revamped the industry’s entry policy regime by enforcing a sole-licensing regime as a requirement to conduct its business in Indonesia.

Although the licensing process and requirements are quite similar with the licensing phase under POJK 77/2016, POJK 10/2022 adds as follows:

  1. an obligation for a Provider to immediately carry out Electronic System Operator (ESO) registration within 30 (thirty) calendar days as of the issuance of business license by OJK;
  2. submission of additional required documents, such as copies of tax return form of the last 2 (two) years for individual shareholder candidates, business feasibility studies for the first 3 (three) years, confirmation from relevant supervisory authority in the country of origin of the foreign shareholders.
  • Capitalization

Previously, POJK 77/2016 required a Provider to have a paid-up capital in the amount of at least Rp2,500,000,000 (two billion five hundred million Rupiah) at the time of licensing. Under POJK 10/2022, the amount is increased to at least Rp25,000,000,000 (twenty five billion Rupiah). POJK 10/2022 also requires the capital to be paid-up in full, cash, and stored in a form of time deposit.

Please note that this capitalization only applies for new Provider candidates, while existing licensed Providers, Providers which are in the licensing phase, and Providers which have returned their registration certificates and would like to resubmit its licensing application are exempted from this requirement.

  • Minimum Equity

POJK 10/2022 introduces a minimum equity to the P2P Lending business whereby a Provider must at all times have equity of at least Rp12,500,000,000 (twelve billion five hundred million Rupiah). The implementation of this requirement is done through stages within 3 (three) years’ time, as follows:

  1. having at least Rp2,500,000,000 (two billion five hundred million Rupiah) within 1(one) year after the issuance of POJK 10/2022;
  2. having at least Rp7,500,000,000 (seven billion five hundred million Rupiah) within 2 (two) years after the issuance of POJK 10/2022; and
  3. having at least Rp12,500,000,000 (twelve billion five hundred million Rupiah) within 3 (three) years after the issuance of POJK 10/2022.
  • Controlling Shareholder and Single Presence Policy

The P2P Lending industry now acknowledges the concept of a ‘controlling shareholder’ (Pemegang Saham Pengendali or “PSP”) which is defined as a legal entity, individual, or group company either: (i) owning at least 25% (twenty five percent) voting shares in a Provider; or (ii) owning less than 25% (twenty five percent) voting shares however can be proven to have any control, whether directly or indirectly, of the Provider.

A Provider is required to state at least 1 (one) PSP, whereby OJK may also decide a Provider’s PSP at its discretion. In the event that there are more than 1 (one) shareholders that fulfills the criteria as PSP, the Provider shall determine all of such shareholders as PSPs of the Provider.

Additionally, the regulation prohibits a party to be a PSP in more than 1 (one) conventional Provider or 1 (one) sharia-based Provider, whereby a party that has already been a PSP in more than 1 (one) conventional Provider and 1 (one) sharia-based Provider, is given 1 (one) year to adjust to the new provisions.

A licensed Provider must also report its determined PSP and any changes thereof to OJK within 6 (six) months since the enactment of the provisions. POJK 10/2022 further extends liability to the PSP of a Provider in certain conditions, such as in the event of a Provider being at loss due to PSP’s involvement in any tort conducted by the Provider.

  • Necessary OJK Approval on Corporate Actions

Previously, there was only 1 (one) general clause which stipulates the requirements of OJK approval for corporate actions. Now, POJK 10/2022 expands on this by stipulating comprehensive provisions relating to corporate matters requiring OJK’s approval, namely:

  1. change of ownership;
  2. increase of paid-up capital;
  3. change of members of Board of Directors (“BOD”), Board of Commissioners (“BOC”), and Sharia Supervisory Board (Dewan Pengawas Syariah or “DPS”); and
  4. merger and consolidation.

Specifically, for point (i) above, POJK 10/2022 further elaborates on what constitutes a change of ownership of a Provider, which consists of changes to the following:

  1. Shareholders of a Provider that is not a public company (direct change of shareholders);
  2. Shareholders of the shareholders of a Provider that is not a public company (indirect change of shareholders);
  3. PSP of a Provider that is a public company; and
  4. PSP of the shareholders of a Provider that is a public company.

There are also additional requirements for a Provider after obtaining OJK approval on corporate matters, such as convening a General Meeting of Shareholders no later than 60 (sixty) working days as of the date of the OJK approval and submitting a report to OJK at the latest 10 (ten) business days as of the date of the GMS. Failure of comply to such provisions will result in various sanctions, such as the void of the OJK approval, written warning, limitation of business activities, and license revocation.

  • Lock-Up Period for Change of Ownership

POJK 10/2022 introduces a lock-up period whereby a Provider is prohibited from conducting any of the abovementioned forms of change of ownership that results in any (i) new shareholder, and/or (ii) change of PSP, within 3 (three) years since the date of the Provider’s business license from OJK.

  • Limitation on the Funding Amount by Each Lender

POJK 10/2022 enforces a new limitation on the maximum amount of lending that each lender (and its affiliates) may provide, which is in the amount of 25% (twenty five percent) of the final lending position at the end of each month. Notwithstanding the aforementioned, please note that such maximum amount may be conducted in stages, as follows:

  1. 80% (eighty percent) of the final lending position at the end of the month, at the latest 6 (six) months after the enactment of POJK 10/2022;
  2. 50% (fifty percent) of the final lending position at the end of the month, at the latest 12 (twelve) months after the enactment of POJK 10/2022; and
  3. 25% (twenty five percent) of the final lending position at the end of the month, at the latest 18 (eighteen) months after the enactment of POJK 10/2022.

However, lenders in the financial services industry that is under OJK’s supervision may provide lending up to 75% (seventy five percent) of the final lending position at the end of each month.

  • Fit and Proper Test

POJK 10/2022 now expressly requires that (i) PSP, (ii) BOD members, (iii) BOC members, and (iv) DPS members (for Sharia-based Providers) shall obtain approval from the OJK prior to their appointment through a fit and proper test. The fit and proper test shall be conducted based on OJK Regulation No. 27/POJK.03/2016 of 2016 on Fit and Proper Test for Main Parties of Financial Services Institutions.

  • Introduction on the Necessity of Business Plan

The new POJK 10/2022 emphasizes the necessity of the Provider’s business plan. Business actions that are required to be included in the Business Plan under POJK 10/2022 are: (i) conversion plan into a sharia business model; (ii) entering into a cooperation; (iii) opening/closing a branch office, (iv) change of name and/or electronic system, (v) plan to change address, (vi) plan to change business model, (vii) plan to change ownership, (viii) increase of paid-up capital, (ix) plan to change members of BOD, BOC, and/or DPS, and (x) merger and consolidation plan.

  • Prohibitions for Provider

Other than the previously regulated prohibition under POJK 77/2016, POJK 10/2022 also introduces several new prohibitions for the Provider, notably:

  1. Prohibition to represent lenders to provide lending and/or provide an automatic lending feature;
  2. Prohibition to give access to the members of BOD, BOC, DPS, and employees as well as their affiliates to act as lenders;
  3. Prohibition to give access to the members of BOD, BOC, DPS, and shareholders as well as their affiliates to act as borrowers;
  4. Prohibition to have any loan (i.e., bank loan, shareholders’ loan, and loan from other sources); an
  5. Prohibition to conduct any action which causes or enforces other financial services institutions under the supervision of OJK to violate and/or circumvent the laws and regulations.
  • Other New Provisions Under POJK 10/2022

As a more comprehensive regulatory framework, POJK 10/2022 contains a myriad of new provisions, rules, and requirements relating to the P2P Lending business in Indonesia, such as:

  1. Corporate Governance. POJK 10/2022 now stipulates an extensive corporate governance requirements for a Provider, such as: (i) requirement to prepare good corporate governance guidelines; (ii) minimum numbers of BOD and BOC as well as DPS (iii) requirements for  competence and qualifications for BOD, BOC and DPS; and (iv) internal audit requirements. Providers are required to comply with the requirements on the minimum numbers of BOD and BOC along with their competence and qualification  within 1 (one) year since the enactment of POJK 10/2022.
  2. Relevant Requirements Relating to Human Resources. Under POJK 10/2022, a Provider must fulfill several requirements with regard to human resources, among others:
    • Requirement for all BOD, BOC, and officials 1 (one) level under the BOD to obtain work competence certificate from an OJK registered certification institution in the fintech industry. Such certification must be obtained within 1 (one) year since the enactment of POJK 10/2022;
    • Requirement for a Provider to have special workforce to develop, change, and erase the Provider’s electronic system;
    • Criteria for the utilization of foreign workers by a Provider; and
    • Restriction on the types of business activities that a Provider may allocate parts of work, namely related to funding assessment and/or information technology.
  3. Business and Operational Activities. POJK 10/2022 sets out extensive rules and requirements concerning the business activities and operation of a Provider, among others:
    • a Provider may only be in the form of a limited liability company;
    • POJK 10/2022 further sets out the types of business activities of a Provider, dividing them into conventional and sharia models and acknowledging 2 (two) types of lending, namely productive and multifunction (multiguna);
    • the use of the payment methods of escrow account, fund account, and virtual account or payment gateway is similarly regulated under POJK 10/2022. However, POJK 10/2022 stipulates a specific maximum period for the fund placement in an escrow account, i.e., 2 (two) working days for the lender and 1 (one) working day for the borrower.
  4. Sharia-based P2P Lending. POJK 10/2022 recognizes the concept of Sharia-based P2P lending, which in essence, P2P lending conducted based on provisions of Islamic law in accordance with fatwa and/or statements of conformity with sharia from Dewan Syariah Nasional Majelis Ulama Indonesia. Additionally, POJK 10/2022 also provides the possibility of conversion from conventional P2P lending to sharia-based P2P lending. As it is already possible to convert, POJK 10/2022 now expressly prohibits conventional Provider to conduct sharia-based P2P Lending activities and must stop all marketing of sharia-based P2P Lending products. Consequently, Providers conducting concurrent sharia-based and conventional P2P Lending activities must settle any outstanding rights and obligations within 6 (six) months since the enactment of POJK 10/2022.
  5. Funding Quality of Provider. POJK 10/2022 now introduces rates of funding quality of Providers into current loans (lancar), loans with special attention (dalam perhatian khusus), non-current loans (kurang lancar), doubtful loans (diragukan), and non-performing loans (macet). Further implementation of this provision will be regulated by the OJK.
  6. Debt Collection. POJK 10/2022 stipulates a general guideline on debt collection in the event of a defaulting borrower through the use of a warning letter to such borrower. POJK 10/2022 also stipulates that Providers may enter into a cooperation with certain qualified third parties, such as those with certifications, to conduct debt collection to its borrowers. Further implementation of this provision will be regulated by the OJK.
  7. Reporting to OJK. Similar to the previous regime, a Provider is required to conduct regular (which consists of monthly and annual reporting) and incidental reporting to OJK. However, Providers are now required to submit an annual financial statement audited by public accountant. Other activities also require a Provider to submit a report to OJK, for example: (i) branch opening; (ii) change of name and Electronic System; (iii) change of domicile; and (iv) change of business model. In addition, POJK 10/2022 now also provides a more extensive set of template forms for submission of reports and/or approval applications to OJK in its Appendix.
  8. Cooperation with Government Agencies and Third Parties. POJK 10/2022 governs on the cooperation between a Provider and third parties, either financial or non-financial institutions, including in relation to the cooperation on data sharing. POJK 10/2022 also opens the possibility for Providers to enter into a cooperation with government agencies to support government programs to become a distribution partner for state securities (surat berharga). However, such cooperation can only be for securities offering in the primary market.
  9. Electronic System, Technical Requirements, and Personal Data Protection. There are several key-items stipulated in POJK 10/2022 relating to the applicable requirements for the Electronic System used by the Providers in performing its business activities, among others: (i) the obligation to own, control, and operate the Electronic System; (ii) prohibition on the number of Electronic System owned by a Provider; (iii) data submission obligation to fintech lending data center maintained by OJK through system integration; (iv) the obligation to have Electronic System processing record; and (v) relevant security requirements for the Electronic System. Personal data protection-wise, POJK 10/2022 adopts a similar approach to the personal data protection provisions adopted in other financial services regulations and still relies on a consent of data subject as the primary legal basis for personal data processing activities.
  10. Further Provisions by OJK. Several matters under POJK 10/2022 will be regulated further by OJK, namely on licensing procedure and mechanism; types of business activities, lender and borrower; risk management; escrow account, virtual account, fund account, and other means of fund transfer; cooperation; data and information processing; lending quality; reporting procedure and mechanism, success rate of repayment (tingkat keberhasilan bayar/TKB), and debt collection.

POJK 10/2022 is in force as of the date of its enactment, July 4, 2022. The new regulation revokes POJK 77/2016 in its entirety and Article 30 letter a of OJK Regulation No. 4/POJK.05/2021 of 2021 dated March 17, 2021 on Risk Management in for the Use of Information Technology by Non-bank Financial Institutions (“POJK 4/2021”). However, the provisions under the previous regime’s implementing regulations still apply so long as they do not contradict to the new POJK 10/2022.

We note that while POJK 10/2022 provides a more extensive regulatory framework for the P2P lending business industry, there are still some aspects that remain unregulated under the POJK 10/2022. In the near future, we expect that OJK will issue more guidelines and legal products to supplement the effective implementation of POJK 10/2022.

Please look forward to our next articles within the series, where we will provide more in-depth elaboration on the notable changes under POJK 10/2022.

July 20, 2022


Please contact Abadi Abi Tisnadisastra (, Alfa Dewi Setiawati (, Noor Prayoga Mokoginta (, Clara Anastasia So (, Caleb Nathanael Sitorus (, M. Satria Kasmaliputra (, and Ammarsyarif G. Goenawan ( for further information.


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