On July 4 2022, OJK issued Regulation No. 10 of 2022 on Information Technology based Joint Funding Services (“Regulation 10/2022“) and revoked Regulation No. 77 of 2016 on Information Technology based Lending Services (“Regulation 77/2016“).

Our team has managed to review Regulation 10/2022. Here is our preliminary summary of key points that we consider potentially relevant for your P2P business in Indonesia:

1. Regulation 10/2022 has been applicable since its promulgation date on 4 July 2022; though it is worth mentioning that a copy of it was not published until recently. This means that Regulation 10/2022 has, per date of this writing, become applicable for:
   a. Existing P2P companies; and
   b. Anyone intending to establish a P2P company.
   
   
2. The minimum paid-up capital is now IDR 25 bio at the establishment, whereas it used to be just IDR 1 bio at the registration (no longer existing). This indicates that authorities have now considered P2P lending, as a mature business. Consequently entry barriers are now higher. Also it is worth differentiating this minimum paid-up capital, with another requirement in Regulation 10/2022, namely a minimum of IDR 12.5 bio equity. This equity, not stipulated in Regulation 77/2016, is defined by Regulation 10/2022 as equity based on the applicable financial accounting standards.
   
   
3. The process to eventually become a licensed P2P company now involves just one step, namely obtaining a business license from OJK. Whereas it used to be a two-step process, namely first obtaining a Registration, before the ultimate Approval, both from OJK. This is aligned with our preliminary analysis above, namely on P2P lending now being considered as a mature business.
   
   
4. The process, and scope, of changes to the shareholding of a P2P company, are now clearer. There are four types of changes that need to be pre-approved by OJK. They include, among others, changes to:
   a. shareholders of a P2P company; and
   b. shareholders of the shareholders of a P2P company.
   Regulation 10/2022 tries to give an example of how the above should be applied. This example, however, is still unclear to us. Further discussions with OJK are necessary, moreover for P2P companies with multi-layer shareholding structures.
   
   
5. Also now, any P2P company is prohibited from changing its ownership, three years after the date of its business license. These changes include those involving a new shareholder or new controlling shareholder.

There are also other key changes that we also consider worth exploring for your operation or investment plans, but not as major. They include:

• The requirement for each P2P company to indicate a minimum of 1 (one) controlling shareholder (limited to exist in just one P2P company);
• Technology certification requirements for BOD, BOC and management members and requirements for BOD to reside in Indonesia;
• Proficiency certificate requirements in Bahasa Indonesia for foreign directors;
• Limited employment period of expats;
• Internal audit requirements;
• Outsourcing requirements;
• Maximum lending percentage from each lender, namely 25% of the previous month’s total lending;
• Registration requirements for any party, whether a financial institution or not, cooperating with a P2P company;
• Data exchange process; and
• A set of more prohibited activities for P2P companies.

This writing constitutes our preliminary finding of Regulation 10/2022, and can be subject to changes or updates within the course of our further review. It should not be construed as our legal opinion. Any use of it, partly or entirely, should firstly be consulted with us, through our Partner, Ron Reisman. Otherwise we, RSPS, cannot be held liable.

Should you have any questions, feel free to contact us through:

Ronaldi Reisman (Co-Founding Partner): rreisman@rspstrategic.com
Gustaf Josua (Associate): gjosua@rspstrategic.com
Putu Mirah Wulansari (Associate): mwulansari@rspstrategic.com