Peer to Peer Lending (P2P) business model was legalized in Indonesia through the issuance of OJK Regulation Number 77/POJK.01/2016 on information technology-based lending (POJK 77). After the issuance of POJK 77, the P2P business was a hot seat business for both local and international business actors. Many P2P companies were emerging in the market, either the one legally registered with the Financial Services Authority (OJK) or the illegal one. The success rate of P2P business is simply and solely owed to the market’s interests in this business model. From the market’s perspective, this business model is perfect to bridge small companies or individuals who have bankability issues with aspiring middle-class society who have an excess fund to be invested. According to research published by Asian Development Bank, P2P business dominated Indonesia’s financial technology market business in 2019, representing 43% of Indonesia’s financial technology business model.   

Due to this rapid growth, the POJK 77 may need to be amended to keep up with the latest P2P trend. In this regard, OJK has prepared a draft amendment of POJK 77 (Draft), which has been uploaded on its website for the public’s input. OJK states in the Draft that one of the reasons for this amendment is to provide financing opportunities to certain people, regions and business sectors that have not received optimal funded opportunities yet.   

Based on a glance at the Draft, the authors note that OJK intends to tighten up the regulation of P2P business model in Indonesia. This might be due to the popularity of the P2P business in the market, which drives the urge of OJK to heavily regulate this sector so that the public’s interests will be protected. Some of the regulations in the Draft were adopted from the prevailing OJK’s regulations for other heavily regulated business sectors, e.g., the insurance companies, securities companies and the Multifinance companies.  

This article will focus on the key regulations in the Draft which differentiate this Draft from the POJK 77.  


The Draft further limits the opportunity of foreign shareholders to invest in a P2P operator company. POJK 77 permits up to 85% of foreign shareholding ownership in a P2P operator company, without any further regulations. The Draft, however, adds further requirements for foreign shareholders to invest in a P2P operator company:  

  1. For foreign entities, the entities must engage in the field of financial services;  
  2. For foreign individuals, they can only invest in a P2P operator company through stock exchanges.  

These requirements will only apply to a newly established P2P operator company. P2P operator companies who have obtained licenses from OJK are not subject to these requirements.   

The Draft also regulates:  

a.  a lock-up mechanism, in which a shareholder is prohibited to sell its shares in the P2P operator company for three years as of (i) the P2P operator company obtains a business license from OJK; or (ii) the P2P operator company obtains OJK’s approval for change of ownership; 

b. a requirement to inject additional capital for change of ownership; nevertheless, the Draft does not regulate a minimum amount for the injection capital;

c. fit and proper test requirements for controlling shareholders.


While the POJK 77 regulates a relatively low minimum issued and paid-up capital for a P2P operator company (IDR 1 billion for registration phase [approx. USD 71,000] and IDR 2.5 billion [approx. USD 177,305] for licensing phase), the Draft regulates otherwise. The Draft requires a minimum issued and paid-up capital of IDR 15 billion (approx. USD 1,064,000) for a P2P operator company. This issued and paid-up capital must be put in a time deposit with a bank. Considering that the Draft requires the capital to be put in a time deposit, arguably the minimum issued and paid-up capital must be more than IDR 15 billion so that the company can have some working capital to operate the business. 


The Draft regulates corporate governance of a P2P operator company, among others:  

a. P2P operator company must hold a monthly meeting which is attended by members of the board of directors and board of commissioners, for at least one time;

b. P2P operator company must have an internal audit unit, and must conduct an audit for at least one time each year;

c. Members of the board of directors and board of commissioners as well as the company’s employee with one level below the board of directors must obtain certification in financial technology management risk from a professional certification institution or the P2P’s association (if the professional certification is not established yet);

d. P2P operator company must have equity in the amount of 0.5% of the total outstanding loan, with a minimum amount of IDR 10 billion (approx. USD 709,220); this requirement can be fulfilled gradually, but must be fully obeyed by the end of 2022; by the end of 2021, the P2P operator company must have a minimum equity amount of IDR 5 billion (approx. USD 354,610);

e. P2P operator company must obtain OJK’s approval before (i) changing the company’s name; (ii) changing the board members; or (iii) changing the business model of the company;

e. P2P operator company must notify the following changes to OJK: (i) change of domicile; or (ii) change of company’s issued and paid-up capital – which does not change the shareholder’s composition; or (iii) status of the company from a private company to publicly listed company - or the other way around;

f. P2P operator company must submit the following reports to OJK: (i) real-time report; (ii) monthly report; and (iii) audited financial statement; the POJ 77 only requires a monthly report and yearly report.   

POJK 77 does not specifically regulate corporate governance on a P2P operator company.

Introduction to Sharia Concept  

The Draft introduces the sharia concept in a P2P lending mechanism. The POJK 77 previously does not regulate about sharia concept in a P2P lending mechanism. Consequently, the Draft adds some regulations for P2P operator companies who operate in sharia principles, among others requirement to have sharia supervisory board and member of the board of directors who has a minimum of one-year experience in sharia financial services company. The members of the sharia supervisory board must first pass the fit and proper test by the OJK before performing their duties.  

For a P2P operator company that previously operates a conventional lending mechanism and wishes to convert to the sharia concept, it must obtain approval from OJK and its users. If there is a user who disagrees with this conversion, the P2P operator company must first settle the rights and obligations of such users before the conversion. 

Board Members  

The table below will describe the difference in the regulation of board members in POJK 77 and in the Draft:  

Human Resources  

The Draft adds more regulations relating to human resources, which is not regulated in POJK 77 yet, among others:  

  1. a P2P operator company must employ an information technology (IT) officer who has at least three years’ experience; the POJK 77 does not regulate about minimum experience requirement of this IT officer;  
  2. the Draft regulates some requirements for employing an expatriate:  
  • the expatriate can only work with the P2P operator company for a maximum of five years;  
  • the expatriate can only be hired for an expert position (in one level position below the board of directors), advisors, or consultants;   
  • the P2P operator company must obtain OJK’s approval before being able to hire the expatriate;  
  • there must be a transfer of knowledge between the expatriate and the local employees.   


a. Licensing Stage

The Draft changes licensing steps of a P2P operator company, from two stages licensing, i.e. the registration phase and business license phase, as regulated in POJK 77 to one stage licensing

b. Electronic System

The Draft requires the electronic system of the P2P operator company to be (i) registered with the authorized governmental institution – in this case, we believe this refers to PSE registration with Ministry of Communications and Informatics; and (ii) to be owned and possessed by the P2P operator company.

c. Data Protection

The Draft adds some requirements on personal data protection to be in line with Regulation of Minister of Communication and Informatics Number 20 of 2016 on Personal Data Protection in Electronic System, among others: requirement to save the personal data within the electronic system for a minimum of five years after being obtained.

d. Funding Requirement

  • The POJK 77 only regulates the maximum funding given to a debtor, i.e., IDR 2 billion (approx. USD 141,845); in addition to the maximum funding, the Draft also regulates the maximum amount given by (i) a lender and its affiliate; and (ii) the shareholders and its affiliate, which is maximum 25% of outstanding loan cumulatively for the investors/shareholders and the affiliates; according to the elucidation of the Draft, affiliate for individual means immediate family members.
  • The Draft requires a minimum funding requirement for:
  • Productive sectors (business which produces goods and/or services) – minimum 40% of the yearly funding;
  • Lenders which are located outside of Java – minimum 25% of the yearly funding;

e. Cooperation with Third Party

  • The Draft provides an opportunity for a P2P operator company to outsource some of its works to a third party provided that (i) the outsourcing will not affect the reputation of the P2P operator company; and (ii) is conducted in compliance with the prevailing manpower laws and regulations;
  • P2P operator companies may exchange data with one another after obtaining OJK’s approval;

f. Corporate Actions

The Draft regulates certain requirements for corporate actions which may be conducted by/occurred to the P2P operator companies, among other mergers, acquisitions, liquidations and bankruptcy. 

g. Prohibitions

The Draft adds some more prohibitions for P2P operator companies, among others:  

  • P2P operator companies are prohibited from facilitating funding in the form of factoring;
  • P2P operator companies are prohibited to conduct auto lending, in which the investors give power of attorney to the P2P operator companies to perform the lending activities; 
  • The board members, members of the sharia supervisory board and their affiliates are prohibited from becoming lender/borrower;

Aside from the abovementioned prohibitions, the Draft extends the possibility of a P2P operator company to obtain a convertible loan (debt to equity conversion) from its shareholders; the POJK 77 does not mention the possibility of shareholders loan;

h. Sanctions

The Draft adds the nominal amount for fines to be imposed on a P2P operator company if it violates certain provisions in the Draft. The POJK 77 does not stipulate any nominal amount for the fines but provides a general regulation that violation of the regulation may be subject to administrative sanctions in the form of fines. 

Transitional Provisions  

POJK 77 will be revoked once the Draft is promulgated. Further, the Draft regulates that a P2P operator company who has obtained a business license from OJK must fulfill the requirements on the minimum amount of board members, the certification requirement and the electronic system requirement by at least 31 December 2021.