Celios Economist Highlights Interest Rules For Online Loan Platforms

Illustration (Photo: Doc Antara)

JAKARTA - Director of Economic Digital Center of Economic and Law Studies (Celios) Nailul Huda indicated that 28 online loan platforms could not meet capital limits due to difficulties in their business.

It is known, the Financial Services Authority (OJK) has announced that 28 online loan platforms experienced problems meeting a minimum equity of IDR 7.5 billion on Monday, August 5.

"The OJK is good in managing interest so as not to burden customers. However, this can also have an impact on the sustainability of the P2P business itself," Nailul said as quoted by ANTARA, Monday, August 19.

To note, since the beginning of 2024, OJK has set new interest rules for peer to peer lending (P2P lending).

In the new regulation, the interest rate for funding for the productive sector is determined at 0.1 percent per day and the consumptive sector is 0.3 percent per day.

"I suspect the 28 platforms may have difficulty collecting capital to meet this minimum limit. The figure of IDR 7.5 billion shouldn't be too big for platforms in the financial industry," continued Nailul.

According to Nailul Huda, the P2P lending business model is different from the loan business model from other financial institutions.

In the P2P business, there are individual lenders and lenders of institutions with more attractive yields being the main attraction for them to invest.

"If interest is too low, this business could not develop and could have a bad impact on consumers. This is because people who are in need of financial loans can be trapped with illegal loan platforms that are prone to fraud and collection practices that make consumers miserable," he said.

Nailul Huda assessed that the consumptive and productive interest arrangement at 0.3 percent with a cost transparency could be a win-win solution for platforms and customers.

"Online loans are usually short tenors, unlike conventional long tenor loans. The application of 0.3 percent interest can be a solution so that legal platforms continue to grow, OJK can still regulate and people avoid illegal online loans," he said.

Previously, OJK through POJK Number 10/2022 Article 50 regulated that P2P lending organizers were required to have equity of at least Rp. 12.5 billion, which was carried out in stages.

Up to one year since the regulation was enacted, P2P lending is required to have at least IDR 2.5 billion in capital.

Furthermore, in the second year, it rose to IDR 7.5 billion. Meanwhile, P2P lending equity is at least IDR 12.5 billion, valid for three years since the regulation was promulgated.