According to the Indonesia Fintech Lending Association (AFPI), Koinworks, which initiated operations in 2015, was Indonesia's first P2P lending platform. By 2020, a report from the OJK showed that there were 149 registered P2P lending institutions.

However, in the following year, there was a significant drop in registered institutions to just 103 providers. This decline is owing to the inability to meet the minimum equity requirement of Rp 2.5 billion (US$ 153,457) stipulated by the 2016 OJK regulation. Additionally, the COVID-19 pandemic strained the national economy significantly. Since then, the number of P2P lending providers has not returned to pre-pandemic levels.

The decline in P2P lending practices is attributed to a variety of social issues. A problem commonly brought up is the debt collection methods, which sometimes involve prohibited measures such as intimidation and violence. Moreover, there is growing concern over high interest rates that affect consumers.

These issues are prevalent not only among illegal providers but also among registered ones. Despite the association claiming that its members operate within the law, the public perception of P2P lending has been notably negative.

The OJK tried to address these problems by issuing Circular Letter No. 19/2023, which has significantly impacted the industry. This regulation emphasizes data privacy, restricting the use of user device features, specifically camera, location and microphone, without explicit consent.

Additionally, the OJK stresses the importance of ethical standards in the debt collection process, prohibiting harassment and any violent methods for data retrieval. Transparency is also a focal point in the regulation, as it requires the provision of accurate figures for the consumer's ability to repay (TKB) and the rate at which one may fail to repay (TWP).