Indonesia's Financial Services Authority (OJK) has inaugurated an insurance support program to strengthen the ecosystem and mitigate risks in technology-based joint funding services (LPBBTI), also referred to as online lending (Pindar), by promoting the use of credit insurance. The program is not mandatory, but OJK positions credit insurance for LPBBTI as an alternative protection for lenders and as a means to support healthier industry development. OJK highlighted key regulatory and risk-mitigation considerations for offering credit insurance in this segment, including charging premiums to the party that bears the risk, applying risk-sharing arrangements, using reliable information systems, conducting comprehensive risk assessments, and ensuring accurate claims analysis. It also set expectations that insurance premiums form part of the economic benefit cost with coverage of around 12 months, that Pindar operators apply periodic and fair coverage evaluations, and that premium increases may only occur at renewal rather than during an active coverage period. OJK stated that, in the initial phase, the credit insurance is intended for institutional lenders and will be further developed to eventually cover all lenders, including retail lenders.

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