Indonesia's Financial Services Authority (OJK) published a statement on the regulation of online lending interest rates, noting it is monitoring and respecting the Indonesian Competition Commission (KPPU) legal process into alleged violations of Article 5 of Law No. 5/1999 relating to an interest-rate cartel in the fintech peer-to-peer lending (LPBBTI/Pindar) industry. OJK said the earlier setting of a maximum “economic benefit” (interest rate) by the Indonesian Fintech Lending Association (AFPI) in its code of ethics, before the issuance of OJK Circular Letter No. 19/SEOJK.06/2023, had been made under OJK direction and was aimed at protecting consumers from high rates and distinguishing legal Pindar lending from illegal online loans. Under Article 84 of OJK Regulation No. 40/2024 on LPBBTI, AFPI is positioned to build market-discipline-based supervision to strengthen and/or rehabilitate providers and to help manage consumer complaints. In that context, OJK asked AFPI to help ensure members comply with all applicable provisions, including the maximum economic benefit limits currently set by OJK: for tenors up to six months, the cap is 0.3% per day for consumptive loans, 0.275% per day for productive micro and ultra-micro loans, and 0.1% per day for productive small and medium enterprise loans; for tenors over six months, the caps are 0.2% per day for consumptive loans and 0.1% per day for both productive micro and ultra-micro and productive small and medium enterprise loans. OJK said it will take compliance enforcement action where violations are found and will periodically evaluate the caps by reference to economic conditions, LPBBTI/Pindar industry conditions, and the broader public’s ability.

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