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1,369 illegal P2P lending platforms blocked, some based in China, US
As many as 127 P2P lending platforms have so far obtained licenses from the OJK, with total loan disbursement of Rp 54.7 trillion as of Aug. 21.
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Online borrowing is gaining popularity in Indonesia, as it is now easy for people to use the internet to access funds. (Shutterstock/File)
T
he Financial Services Authority (OJK) has discovered 1,369 illegal peer-to-peer lending platforms since October, last year, some of which used servers based in China and the United States.
The OJK’s investment alert task force chairman, Tongam L. Tobing, said the Communications and Information Ministry had blocked the illegal lending platforms but preventing the emergence of new platforms would still be a challenge.
“Many of these platforms use foreign servers such as from China and the United States, so it is difficult to track certain perpetrators,” he said. The number of illegal online P2P lending platforms this year has more than tripled from only 404 entities reported last year.
As many as 127 P2P lending platforms have so far obtained licenses from the OJK, with total loan disbursements of Rp 54.7 trillion as of Aug. 21. The number of borrowers and investors reached 530,385 and 207,507, respectively during the same period.
Earlier this year, the Indonesian Consumers Foundation (YLKI) reported that online lending platforms were the third-most complained about business sector, following property and banking.
Data from the OJK showed that as of October 2019, the agency had also come across 263 illegal investments and 171 foreign exchange trading companies. The agency has estimated that from 2008-2018, fake investments had caused total losses of Rp 88.8 trillion (US$6.27 billion).
Tongam said most victims of fake financial services were unaware of proper investment schemes and were quickly attracted by promises of big profit.
