JAKARTA. Last year, OJK (Financial Service Authority or FSA) had issued a regulation on off balance sheet lending. Recently, OJK is also planning to release a new regulation related to on balance sheet lending. The OJK is targeting to issue regulation in the quarter II-2017.
Chief Executive of Non-Bank Industry Supervisory Firdaus Djaelani said, the financial technology (fintech) service for on balance sheet lending allows the direct lending money transaction between the customers and fintech providers. Meanwhile, the off balance sheet lending fintech service brings together the borrowers and the lenders.
In the scheme of on balance sheet lending, fintech providers play role in lending their money to the costumers. However, the rules of on balance sheet lending fintech service would not be as tight as insurance and banking rules, on the grounds that on balance sheet fintech service does not collect public funds.
Firdaus is promising that the points of the regulation will be simple. The regulation would include some rules related to the on balance sheet fintech service providers, such as their gearing ratio, the number of capital, the amount of obtained funds abroad, as well as the maximum amount of loans allowed. “We hope that the OJK regulation will be released in the quarter II-2017,” Firdaus said, Tuesday (14/2).
Minimum capital
Deputy Commissioner of Non-Bank Industry Supervisory II of OJK Dumoly Pardede said, ideally an on balance sheet fintech service provider should have work capitals of Rp 10 billion-Rp 20 billion. This number is much higher than the minimum paid capital should be held by off balance sheet lending fintech service provider at Rp 1 billion. Meanwhile, the maximum loans allocated for a customer of on balance sheet fintech service provider is Rp 25 million.
The on balance sheet lending scheme allows the foreign investors’ capitals. However, OJK has not yet determined the maximum foreign ownership on the scheme of balance sheet lending. According to Firdaus, foreign investors may be playing role as the funding resources.
Firdaus added that the OJK will consider the average costs of funds in determining the maximum interest rate of on balance sheet lending fintech service. OJK estimates that the interest rate would be affected by the market mechanism. The similar condition takes place in the banking business.
During the absence of the regulation, the OJK allows the on balance sheet lending fintech service providers to operating as normal. In this case, the OJK could not label the operating on balance sheet fintech as illegal. However, the OJK calls the fintech association to protect consumers’ rights in their operations.
One of the on balance sheet lending fintech service providers, namely PT Digital Alpha Indonesia (Uang Teman) positively responds the OJK’s plan to issue the regulation. Deputy CEO of Uang Teman Rio Quiserto said that the company will comply with the OJK regulation. (Muhammad Farid/Translator)
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