OJK to Regulate Interest Rate Cap on Online Loans

TEMPO.CO, Jakarta - The Financial Services Authority (OJK) confirmed that it would soon regulate the interest rate ceiling on online loans in a bid to prevent peer-to-peer lending platforms from charging more than a certain level of interest.

“We are now preparing regulations on other limits [including the maximum rate of loan interest],” Edi Setijawan, the director of OJK’s non-bank financial industry and digital financial innovation unit, said in Central Jakarta on Thursday, October 12, 2023.

He explained that ideally, pricing should be left to the market between supply and demand. However, if conditions are not ideal, the regulator can perform an intervention.

“This aims to ensure that there is justice for both the borrower (debtor) and the lender or the platform,” Edi explained.

He said the OJK is determined to balance everything. That's why his side is preparing the regulations. “Yes, it will be about the upper limit of the interest rate, not the lower. It’s okay [for the platforms] to set it low. The lower, the better,” he said.

However, Edi did not elaborate on when OJK would pass the regulation, saying that it would be soon. “It’s expected to come out this year,” he said.

AMELIA RAHIMA SARI

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