OJK Urges Sharia Finance to Optimize Fintech

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  • Queen Maxima of the Netherlands gives speech during the closing event of Fintech Festival & Conference 2016 at ICE BSD City, Serpong, August 30, 2016. TEMPO/Aditia Noviansyah

    Queen Maxima of the Netherlands gives speech during the closing event of Fintech Festival & Conference 2016 at ICE BSD City, Serpong, August 30, 2016. TEMPO/Aditia Noviansyah

    TEMPO.CO, Jakarta - The Financial Service Authority (OJK) chief Wimboh Santoso encourages the sharia finance industry to continue expanding businesses using the latest technology. One way is by optimizing the utilization of financial technology or fintech.

    "Fintech is a strategic opportunity for sharia finances to expand their market segment," Wimboh said in a statement, Friday, May 4.

    However, according to Wimboh, industry players must also understand the risks of fintech businesses. The financial industry, he added, should also have good mitigation plans as an effort to improve consumer protection.

    Read: OJK to Monitor Fintech

    The OJK issued the peer-to-peer (P2P) lending rule at the end of 2016. The regulator is now formulating a rule on digital financial innovation.

    "The regulation is expected to improve consumer protection and maintain financial system stability, as well as prevent money laundering and combating terrorism funding," Wimboh said.

    As of March 2018, sharia banks' assets amounted to Rp439.32 trillion, up 19.33 percent (yoy). The Islamic finance industry recorded Rp294.7-trillion financing portfolio, or up by 14.41 percent (yoy).

    As per March 2018, there were 50 P2P lending fintech companies registered with the OJK. The value of loans disbursed amounted to Rp4.47 trillion, a 74.45 percent increase (ytd).

    Dewi Nurita