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OJK hunts down fraudulent P2P firms
The Financial Services Authority (OJK) is set to crack down on the growing number of unlicensed peer-to-peer (P2P) lending financial technology (fintech) firms in Indonesia as they have been taking advantage of a huge consumer base, who often lack awareness in financial services
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T
he Financial Services Authority (OJK) is set to crack down on the growing number of unlicensed peer-to-peer (P2P) lending financial technology (fintech) firms in Indonesia as they have been taking advantage of a huge consumer base, who often lack awareness in financial services.
OJK officials have released its list of 227 unlicensed P2P lenders operating in the country, by far outnumbering the legitimate and licensed ones, of which there are 63 as of July.
The OJK’s investment alert task force chairman Tongam L. Tobing said over the weekend that his office had begun marking down unlicensed P2P lenders since 2017.
Prior to the release of the list, the OJK had also summoned the illegal firms between Feb. 19 and July 25 and encouraged them to register with the authority.
“After we summoned them, some of the firms finally agreed to register,” Tongam said in a press conference. “However, many more of the illegal firms remain unregistered.”
Many of the firms did not provide a mailing address or other contact details, making it hard for the OJK to track them down, he added.
In line with the summons, the OJK has coordinated with several institutions to impose legal measures on the fraudulent firms, such as the Communications and Information Ministry, Google Indonesia and the National Police’s Criminal Investigation Department (Bareskrim).
The Communications and Information Ministry, for example, could help to block access to the firms’ websites, whereas Google could implement a filter on search results in Indonesian language keywords that translated into ‘loans’, ‘debt’ or ‘installments’ at google.com and the Google Play Store platform.
Additionally, all data the task force found on the firms would be handed over to Bareskrim as it was the one capable of imposing legal action on them, Tongam said.
“More than half of those [fraudulent] firms are from China. The [Chinese] government is tightening its P2P lending regulations, so the firms fled [China] and found a new base here,” he said.
As The Jakarta Post observed from the list, a single firm could have developed multiple illegal lending platforms. For example, a developer named Xinhe had uploaded at least nine P2P lending apps to the web and Google Play Store platform.
Other developers with Chinese names such as LiChen, Tupulian and Xiehualei had also established lending apps using Indonesian names such as Dompet Pinjaman (loan wallet), DompetKamu (your wallet) and Duit Instan (instant cash).
Based on a 2016 OJK regulation on fintech lending firms, every P2P lender must account for a minimum of 15 percent domestic ownership in order to be able to operate in Indonesia.
When contacted separately, Adrian Gunadi, vice chairman of the Indonesian Fintech Association (AFTECH), said the group had been helping out the authority by providing its database on both legal and illegal P2P lenders in Indonesia.
“It is also hard for us to reach out to the unregistered [P2P lenders] since they are not part of the association, even though we certainly always try to encourage them to obtain the permits,” said Adrian, who is also the CEO of P2P lending platform Investree on Sunday.
He said unlicensed P2P lending firms were threatening legitimate firms operating in the country, many of which actually had foreign investors and venture capitals in their list of investors. Illegal lending firms, he said, could abuse their consumer data and lose public trust in the entire industry.
Adrian said the OJK had given endorsement for code of conduct on fintech lending business, including guidance on consumer protection and proper fund collections.
