JAKARTA - The Financial Services Authority (OJK) is currently drafting the OJK Regulation Draft (RPOJK) on Alternative Credit Ratings (PKA) as a follow-up to the results of the Regulatory Sandbox which stipulates the Alternative Credit Rating business model to be regulated and supervised by OJK.
"We are also drafting the full licensing regulations for this PKA, Alternative Credit Ratings. So if the regulation is issued later, they will be the same as other financial services business actors, they will apply for a full business license to OJK through the POJK regulation," said the Chief Executive of the Financial Sector Technology Innovation Supervisor, Digital Financial Assets and Crypto Assets of OJK Hasan Fawzi, in Jakarta, quoted from Antara, Monday, November 11.
This was conveyed by Hasan to the media crew after the launch of the National Fintech Month (BFN) and the 6th Indonesia Fintech Summit and Expo (IFSE) 2024.
The RPOJK will regulate the implementation of PKA business activities related to principles and scope, business licensing provisions, institutions, governance, PKA implementation, supervision, and other aspects related to PKA.
Hasan further said that there are three main functions of the presence of PKA, namely presenting the quality of the credit score of each individual and micro, small and medium enterprises (MSMEs).
"Many of our people do not have historical credit data, it would be a shame if they were not served. Well, that need arose and was answered by the presence of this alternative credit rating agency. This opens up accessibility to services that they might not have previously been served, because they don't have historical scoring data," he said.
PKA can also expand business access for financial service institutions in distributing credit, including to those who have not been served, so that they can open up new market segments.
"Actually, opening up business access from financial service institutions that might not have previously been able to serve due to limitations in making credit distribution decisions, now with this alternative credit score, their business is expanding because they are starting to open up new market segments," he said again.
In addition, the presence of PKA will be able to improve the credit quality of financial service institutions that distribute credit to individuals and MSMEs.
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"And the last (benefit) is to improve the quality of its own credit. With good credit scoring information, then this financing institution will also have the potential to reduce the probability of default (possibility of default) or the level of bad debt," he also said.
With credit scoring that can encourage credit distribution from financial service institutions that increasingly reach the community, it is hoped that the community can switch to online loan providers (pinjol) licensed by the OJK and not use illegal pinjol services.
"If illegal online loans from the start, we really have to eradicate them, because their presence is certainly not licensed, not monitored. We have no certainty for consumer protection aspects and so on. Well, with this credit scoring, hopefully with the expansion of existing businesses, people no longer need to refer to the illegal ones, the legal ones are now opening and serving," he said.
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