News: Indonesian financial watchdog cracks down on unlicensed fintech lending platforms

By Staff Writer

A special task force of the Indonesian Financial Services Authority, or OJK, has banned 144 entities engaged in peer-to-peer lending in Indonesia for failing to obtain licenses amidst a massive increase in fintech activities in the country, Jakarta Globe has reported.

The paper quoted Tongam L. Tobing, chairman of the task force that monitors financial technology companies and online platforms engaged in consumer lending, as saying that the OJK believes that many P2P firms operate in Indonesia illegally. He has urged the public to work with 106 companies that are registered with the government.

Tongam said the financial regular has identified 543 unlicensed fintech companies offering peer-to-peer lending so far this year, compared with 404 in 2018. Some of them may be in the process of obtaining licenses, while many are operating illegally.

Some fintech lenders are said to have caused major unease in the country as debt collectors often intimidate clients. They also harvest data from their clients’ smartphones, often unbeknownst to users, including contact lists, making them prone to abuse.

In addition to fintech companies doing business illegally, the task force also banned 73 investment services on April 24 for operating without valid permits.

These companies were found to be engaging in multi-level marketing, foreign exchange and cryptocurrency trading, and money market and plantation-backed investments.

This brings the number of entities that have been banned so far this year from offering investment services in the country to 120.

OJK announced the list of fintech and investment services that have been banned along with the statement.

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