JAKARTA - Indonesia is aiming for more oversight of the fast-growing peer-to-peer (P2P) lending industry, which has benefited many individuals and small businesses seeking modest sums from as low as 500,000 rupiah (S$41).
Since July, financial technology firms in the microfinance sector have been required to submit their financial transactions and file financial reports to the Financial Services Authority (OJK).
The move came about following the recent exit of major P2P lender TaniFund after the OJK revoked its operating licence in May, due to a liquidity crisis that ensued as borrowers defaulted on loans and lenders were not repaid. The industry regulator is conducting investigations into fraud allegations against TaniFund and two others, Investree and iGrow.
There are currently 98 licensed P2P lenders registered with the OJK, compared with 30 in 2017. To date, P2P lenders in Indonesia have given out loans totalling 66.9 trillion rupiah to 131 million borrowers, from 284.2 billion rupiah in December 2016.
P2P apps allow users to transfer and receive money speedily, using digital platforms or mobile applications without going through intermediaries such as banks.
Mr Izzudin Zidan, 43, who runs two food stalls selling fried chicken and tempeh in Jakarta, has borrowed small sums of up to 500,000 rupiah from P2P lenders to buy cooking oil, flour and other ingredients for his business.
"I needed only an app and then applied for the loan with my identity card. I got the money a few hours later. It was so fast," the father of two told The Straits Times.
He was able to repay each loan within a month, incurring hefty monthly interest rates of as much as 40 per cent. Commercial banks would charge lower interest rates of between 7 per cent and 8 per cent a year, Mr Izzudin noted.
هذه القصة مأخوذة من طبعة August 05, 2024 من The Straits Times.
ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.
بالفعل مشترك ? تسجيل الدخول
هذه القصة مأخوذة من طبعة August 05, 2024 من The Straits Times.
ابدأ النسخة التجريبية المجانية من Magzter GOLD لمدة 7 أيام للوصول إلى آلاف القصص المتميزة المنسقة وأكثر من 9,000 مجلة وصحيفة.
بالفعل مشترك? تسجيل الدخول
Mbappe could be stripped of captaincy
PARIS France captain Kylian Mbappe is facing criticism in his home country for skipping Les Bleus' Nations League games against Israel and Belgium while being available to play for his club Real Madrid.
STEWING OVER 'WORST' DEFEAT
Spurs boss slams unacceptable second half’ at Brighton, conceding thrice in 18 minutes
CHRISTIAN IS ROOKIE CHAMP
S’pore driver heads to Eurocup-3’s final round with chance of being overall winner
TENNIS STARS PICK 'SECOND FAMILY'
New coaching partnerships help top players refresh, improve their games
Scepticism over Chinese stocks remains despite world-beating rally
Global fund managers waiting for Beijing to back up stimulus pledges with real money
US scientists win Nobel Prize in medicine for work on microRNA
Duo lauded for discovering new principle of gene regulation for multicellular organisms
Hurricane Milton strengthening as it heads towards Florida
FLORIDA Hurricane Milton is intensifying on its path towards Florida possibly reaching Category 4 power and may spark the largest evacuation in seven years as it aims for the state's Gulf Coast and Tampa.
Trump on the stump, Harris hits airwaves with race on razor's edge
US presidential candidates scramble for votes in 7 swing states vital to poll victory
China military drills expected soon after Taiwan national day
China is likely to launch military drills this week near Taiwan, using Taiwan President Lai Ching-te's upcoming national day speech as a pretext to pressure the island to accept its sovereignty claims, Taiwanese officials say.
Gaza war deadliest conflict for journalists: Observers
Israel refutes claim by advocacy group that it directly targeted 32 media workers