TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Popular Reads
Top Results
No results found. Please check your search term and try again
Can't find what you're looking for?
View all search results
Popular Reads
Top Results
No results found. Please check your search term and try again
Can't find what you're looking for?
View all search resultsKPPU slaps $44m fine on P2P lenders over cartel scheme
The Indonesian Fintech Association (AFPI) has expressed disappointment over the ruling, saying that the maximum economic benefit set by its members was determined under a directive from the Financial Services Authority (OJK).
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
A phone user opens a peer-to-peer (P2P) lending app called AdaKami on Sept. 10, 2024, an app that since now displays a specific warning to discourage people without the ability to repay from applying for loans. (JP/Muhammad Zaenuddin)
T
he Business Competition Supervisory Commission (KPPU) has found 97 peer-to-peer (P2P) fintech lending companies guilty of operating interest-rate cartel practices.
KPPU announced in a statement on Thursday that the companies had violated Article 5 of Law No. 5/1999, which stipulates the prohibition of monopolistic practices and unfair business competition, and were consequently ordered to pay a combined total of Rp 755 billion (US$44.6 million) in fines.
“This ruling marks the conclusion of one of the largest competition cases ever handled by the KPPU, both in terms of the number of respondents and the scope of the industries that directly affect the wider public,” reads the statement.
During the hearing process, the companies were found to have been involved in an agreement to set interest rates and economic benefit by imposing a cap “far above the market’s equilibrium level”. This practice is not only “nonbinding and ineffective in protecting consumers, but also potentially functions as a mechanism to facilitate price setting coordination between business players”.
In that case, KPPU noted that setting an interest rate cap could shape businesses' expectations and pricing strategies, prompting firms to align their rates and weakening competition in the market.
The case began last year, with an initial hearing in August, during which investigators presented their allegations. However, the respondents denied all the claims, prompting a further stage of examinations.
Read also: Fraud and other risks still holding back P2P lending business
