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OJK Responds to MUI's Edict That Bans Online Loans Containing Riba

Translator

Dewi Elvia Muthiariny

Editor

Markus Wisnu Murti

November 12, 2021 | 04:48 pm

Online loan illustration. Freepik

TEMPO.CO, Jakarta - Financial Services Authority (OJK) spokesperson Sekar Putih Djarot responded to the Indonesian Ulema Council's (MUI) edict or fatwa that declares online or offline loans charging interest or known as riba is haram or unlawful according to the Islamic law. According to Sekar, Indonesia's financial system still adheres to a dual system, so it is still possible for online or offline loans to be set based on conventional and sharia law.

"We interpret it as a forbidden practice committed by illegal lenders," said Sekar on Friday, November 12.

President Joko Widodo or Jokowi is worried about illegal online loans and urges OJK, ministries and the police to eradicate them. Sekar emphasized that ministries and agencies are striving to tackle practices of high interest loans and debt collectors that violate the law.

According to her, the OJK and the police have been proactive in uncovering the root causes of the loan problem and taking legal repressive measures. The OJK, she added, had also spoken with the Indonesian Fintech Lenders Association (AFPI), which agreed to urge lenders to drop the current loan interest rate by 50 percent.

"OJK is now preparing to restructure the loan ecosystem, starting from [the elements of] capital, fit and proper, risk management and others," she said.

Read: Jakarta Police Launch Hotline to Fight Illegal Lending

HENDARTYO HANGGI

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