Regarding The Pinjol Interest Rate Limit, OJK Immediately Issues New Rules

JAKARTA - The Financial Services Authority (OJK) is preparing new rules regarding the interest rate limit for peer-to-peer lending (P2P lending) or online loans (pinjol).

Head of the Supervision Department of Micro Financial Institutions and Other Financial Services Institutions OJK Edi Setijawan said that the regulation would be issued as soon as possible.

"Yes, yes, we are preparing regulations regarding (interest rates)," said Edi quoting Antara, Thursday, October 12.

He made this statement in response to the alleged presence of individuals who set interest rates of up to 0.8 percent per day.

Edi explained that the interest rate of 0.8 percent per day was valid in 2017, and has long been revised to 0.4 percent per day in 2022 with a short-term tenor of less than 90 days.

Based on the rules of the Indonesian Joint Funding Fintech Association (AFPI), the interest set for tenors of more than 90 days varies, some 0.1 percent to 0.2 percent.

"Basically, the pricing is ideally left to the market, between demand and supply. However, when conditions are still not ideal, the authorities need to intervene to ensure that there is justice for both the borrower and the lender, as well as on the platform," said Edi.

For this reason, regarding the news that the interest rate of the loan service is considered to exceed the limit, he added that the OJK continues to coordinate with AFPI as an association to urge its members to always comply with the set interest limits.

"So, we are trying to balance everything. Therefore, we are preparing the maximum limit. Then the OJK also focuses on pushing from the peer-to-peer lending side," he concluded.

AFPI General Chairperson Entjik S. Djafar also confirmed that he would impose sanctions on p2p lending companies that violate the rules regarding the loan interest rate.

Entjik emphasized that the interest rate of 0.4 percent per day is the maximum limit, not the minimum limit. The statement was intended to refute allegations by the Business Competition Supervisory Commission (KPPU) regarding the alleged loan interest cartel.

KPPU suspects that AFPI has set a 0.8 percent interest rate per day, which is attended by 89 registered members. KPPU said that the determination has the potential to violate Law Number 5 of 1999 concerning the Prohibition of Monopoly Practices and Unhealthy Business Competition.