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OJK welcomes private pawnshops in financial industry

Ayomi Amindoni (The Jakarta Post)

Jakarta

Thu, October 6, 2016 Published on Oct. 5, 2016 Published on 2016-10-05T21:11:47+07:00

People queue at an outlet of state-owned pawnshop Pegadaian in Semarang, Central Java, to obtain financing. (kompas.com/Syahrul Munir )

A

fter releasing a new regulation on pawnshops, allowing private players to participate in the industry, the Financial Services Authority (OJK) has invited private entities to open pawnshops to end the monopoly of state pawnshop Pegadaian.

"Our goal in allowing the establishment of private pawnshops is to increase access to finance for people, as well as to increase liquidity," the OJK commissioner overseeing non-banking financial institutions, Firdaus Djaelani, said during a discussion forum called "Indonesia's Responsible Access to Finance" in Jakarta on Wednesday.

Currently, the only pawn business that has been licensed is Pegadaian, while the OJK recorded about 2,000 private pawn businesses operating without permission.

Therefore, the authority issued OJK regulation (POJK) No. 31/POJK.05/2016 on pawnshop businesses, published July 29.

The OJK would give private pawnshop players two years to apply for business licenses. The regulation also requires private pawnshops to have a minimum paid capital of Rp 500 million (US$38,439) for businesses with the service scope of a district and Rp 2.5 billion for businesses with the service scope of a province. (bbn)