TEMPO.CO, Jakarta - President Joko "Jokowi" Widodo demanded the Financial Services Authority (OJK) issue a moratorium on the issuance of new business licenses for online loans following the rampant emergence of illegal financial technology or fintech companies that offer loans with irrational, high-interest rates.

“Given the many criminal acts in the online loan affairs, the President orders the OJK to conduct a moratorium on the issuance of licenses for fintech on new legal online loans,” said Communications and Information (Kominfo) Minister Johnny Gerald Plate at the State Palace, Jakarta, Friday, October 15.

According to Johnny, the head of state emphasizes that online loan management must be monitored and implemented properly because there are more than 68 million people who are part of the fintech ecosystem.

Besides, the fintech business has generated a large cash turnover reaching Rp260 trillion. To date, OJK has granted online loan business permits to 107 entities.

The government would also clean the digital space from illegal online lending practices. The police, Johnny went on, would take firm actions to prosecute illegal companies that trap people with jumbo interest rates.

In line with the efforts, the Kominfo ministry will continue to shut down illegal online loan sites and mobile applications. Since 2019, Johnny said, the ministry has blocked access to 4,874 online loan accounts spread across Google, PlayStore, YouTube, Instagram, and file sharing. Of that number, 1,856 accounts will be fully closed this year.

“The Kominfo Ministry has also established a digital economy forum that holds monthly meetings to discuss the developments, improvements, and updates of the digital space and digital economy transactions, including online loans,” said Johnny.

Read: Bank Indonesia Bars Non-Bank Firms from Helping Illegal Online Lending Services

FRANCISCA CHRISTY ROSANA | DEWI NURITA