2018 saw a peer-to-peer (P2P) lending sector upswing in Indonesia, the most populous country in Southeast Asia.
According to data recorded by Indonesia’s Financial Services Authority (OJK), total loans distributed through P2P lending platforms reached IDR 20 trillion (US$1.4 billion) last year, a whopping 681.25% year-over-year increase from 2017’s IDR 2.56 trillion (US$182.4 million).
OJK fintech licensing, regulation and supervision director Munawar Kasan said the number of people who applied for loans had also increased dramatically.
“The loans transaction valued at IDR20 trillion while the number of debtors reached 4 million which indicates that society benefited from the presence of fintech,” said Kasan as quoted by local media Kontan.
Kasan believes that the high number of fintech transactions will help small and medium enterprises that need business capital. In addition, the presence of new players helped boost the value of loan transactions.
Until December 2018, 88 fintech operators have obtained licenses and are registered with OJK, 10 of which are new operators, namely AdaKami, ModalUsaha, Asetku, Danafix, Lumbung Dana, lahansikam, National Capital, Dana Bagus, ShopeeKredit, and Ikredo online.
P2P lending in Indonesia is surrounded by controversy, especially public complaints regarding unethical debt collection methods by illegal fintech operators. The Ministry of Communication and Information has blocked 738 illegal fintech platforms that were not registered with OJK, including 211 sites and 527 apps on the Google Play store.
Editor: Ben Jiang & Nadine Freischlad