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How e-commerce transactions, utility bills affect credit scores: OJK

The Financial Services Authority (OJK) has explained new rules for innovative credit scoring (ICS) to assess the creditworthiness of people and small businesses that lack traditional credit histories.

Aditya Hadi (The Jakarta Post)
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Wed, January 22, 2025

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How e-commerce transactions, utility bills affect credit scores: OJK A woman looks at a pop-up public announcement from the Financial Services Authority (OJK) on Sept. 10, 2023, warning users to be aware of illegal lending platforms. (Antara/Cahya Sari)

T

he Financial Services Authority (OJK) has explained new provisions that allow for the use of alternative data sources to assess the creditworthiness of consumers that do not have traditional credit histories, as stipulated in OJK Regulation No. 29/2024.

Many Indonesian citizens and small businesses have no credit history with banks or other financial institutions, meaning their information is not included in the OJK's Financial Information Service System (SLIK) that banks typically use to assess the creditworthiness of existing and potential customers.

Innovative credit scoring (ICS) firms leverage alternative sources, such as telecommunications use, utility payments and e-commerce transactions to compile data and assign a score for a particular individual. This score can then be used by financial institutions, including peer-to-peer (P2P) lenders, to determine the creditworthiness of a potential debtor.

“The solutions offered by ICS firms will complement the credit history [of an individual or business] in the SLIK,” the OJK said in a statement on Tuesday.

“Their services address the challenges of credit scoring for unbanked and underbanked segments, including small and medium enterprises [SMEs],” it said.

Under the new regulation, which went into effect on Dec. 18, ICS firms must have minimum capital of Rp 5 billion (US$306,400) and are subject to an 85 percent cap on foreign ownership of both direct and indirect stakes in local ICS companies.

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Hasan Fawzi, executive head of fintech innovation and digital assets supervision at the OJK, revealed in November that four ICS firms had formally registered with the authority, while the registration of 10 others were in progress.

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