To support the development of a technology-based financial industry in Indonesia, in December 2016 the Financial Services Authority (OJK) issued Regulation 77/POJK01/2016 regarding technology-based fund-lending services. In its press release, the OJK stated that the regulation was designed to protect consumer and national interests, while at the same time provide opportunities for local providers of financial technology (fintech) to grow and contribute to the national economy.

The OJK's fintech-based money lending services or fintech peer-to-peer (P2P) lending platforms are meant to facilitate the provision of cash funds on an expeditious, simple and efficient basis, particularly for small and medium-sized business operators to help boost their competitiveness.

Regulation 77/POJK01/2016 sets out a range of comprehensive guidelines for the organisation of P2P lending services. It defines 'P2P lending services' as financial services that are provided via online systems and facilitate collaboration between lenders and borrowers for the purpose of entering into loan agreements in Indonesian rupiah.

The P2P lending scheme involves three principal parties:

  • providers – Indonesian legal entities that obtain funds from lenders and pass them on to borrowers;
  • borrowers – Indonesian citizens or legal entities; and
  • lenders – Indonesian or foreign citizens or entities, as well as international organisations.

The lending transaction is effected by the parties entering into the following types of agreement:

  • an agreement between providers and lenders; and
  • an agreement between lenders and borrowers.

Both agreements must be drawn up electronically. Providers are restricted by the following rules:

  • A provider must be established as a legal entity in the form of a limited liability company as defined by Law 40/2007, or in the form of a cooperative as defined by Law 25/1992.
  • The maximum direct or indirect foreign share ownership in providers – in the form of a limited liability company established and owned by foreign citizens or legal entities – is 85% of the total issued capital.
  • Providers must have Rp1 billion in capital (ie, paid-up capital for a limited liability company and self-capital for a cooperative) at the time they apply for registration and Rp2.5 billion at the time they apply for the licence. Limited liability companies or cooperatives intending to engage in P2P lending services must register with and subsequently apply for a licence from the OJK.
  • Providers are prohibited from conducting other business outside P2P lending services, including:
    • acting as a lender or borrower;
    • providing security or guarantees for other parties' debt; and
    • issuing bonds.

Parties that engage in this type of lending service before the issuance of Regulation 77/POJK01/2016 must register with the OJK by June 2017 at the latest.

For further information on this topic please contact Miriam Andreta at Ali Budiardjo, Nugroho, Reksodiputro by telephone (+62 21 250 5125) or email ( The Ali Budiardjo, Nugroho, Reksodiputro website can be accessed at

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