Indonesia's financial regulator plans to require fintech firms to register with authorities to engage in fundraising activity, Bloomberg News reported May 14, citing an official from the watchdog.
Companies will have to register to raise funds from banks and the financial markets, said Nurhaida, vice chairman at the Financial Services Authority, known as OJK. Regulation of the sector would make it more transparent and allow lenders to better calculate risks, with an aim of lowering interest rates, she added.
Draft rules propose to cap borrowing costs at 7x the central bank's policy rate, while minimum requirements also call for banks and their fintech partners to have core capital of at least 1 trillion Indonesian rupiah, as well as satisfactory risk ratings.
The OJK moved to review peer-to-peer lending regulations following a surge in lending by fintech firms, as greater access to the internet and the penetration of smartphones allowed more unbanked Indonesians to tap financial services. Peer-to-peer lending jumped 38% to 3.5 trillion rupiah in January and February from a year earlier, the report said.
However, Nurhaida noted Indonesia will not relax rules such as an 85% cap on foreign ownership of fintech companies, as well as a 2 billion rupiah limit on credit that can be extended to individuals by peer-to-peer lenders.
As of May 14, US$1 was equivalent to 13,982 Indonesian rupiah.
