Peer-to-Peer Lending Sector to Expect More Consolidation

The Financial Services Authority (OJK) is still reviewing plans to open a moratorium on permits for fintech peer-to-peer (P2P) lending. This is because most P2P lending companies are still losing money. "Of the 102 companies, 61 companies have negative profitability. If we open the moratorium, the minimum capital requirement for P2P lending will immediately increase to Rp 25 billion," Chief Executive of OJK's Non-Bank Financial Industry Supervision Ogi Prastomiyono said during a Focus Group Discussion in Bogor, Friday.

Based on OJK Regulation No. 10/2022 on Information Technology-Based Joint Funding Services published on July 4, Article 4 Paragraph 1 states that peer-to-peer lending companies must have a minimum capital of Rp 25 billion. This provision will take effect three years after the issuance of the POJK or in 2025. Under the previous provisions, P2P lending must have a minimum capital of Rp 1 billion for registration and Rp 2.5 billion for applying for permits.

"We are still reviewing whether it's true that P2P lending institutions are sustainable and growing. We will see which ones survive and which do not," Ogi said. OJK has put a moratorium on fintech P2P lending permits since Feb 2020. As a result, P2P providers have decreased to 102 companies from around 161.