The high percentage of non-performing loans (NPLs) in the peer-to-peer (P2P) lending industry has raised concerns among authorities, particularly the Indonesian Financial Services Authority (OJK), which oversees the P2P lending sector. The high level of consumerism and the low screening standards of borrowers are among the key factors contributing to the increase in NPLs. The OJK has enacted several new regulations and implemented policies to enhance regulatory oversight of P2P companies. This publication will focus on the changes and the implications.
On 31 July 2025, the OJK officially issued implementing and explanatory regulations for OJK Regulation No. 40 of 2024 concerning Information Technology Based Joint Funding Services, through OJK Circular Letter No. 19/SEOJK.06/2025 on the Implementation of Information Technology Based Joint Funding Services.
One of the most notable aspects of this regulation is the tightening of credit scoring assessments, particularly with respect to the repayment capacity of consumer borrowers. OJK now limits the ratio between a borrower’s total debt repayment obligations and their income. While the maximum threshold remains at 40% in 2025, it will be reduced to 30% starting in 2026.
This means that a person’s total debt instalments, whether originating from P2P lending platforms, banks, finance companies, venture capital firms, pawnshops, or other financial services institutions may not exceed 30% of their income. Such income must be supported by valid documentation, such as salary slips or bank account statements.
The implication is relatively straightforward whereas borrowers will no longer be able to obtain large loan amounts if their income is limited or if they already carry significant debt obligations. This policy aims to ensure that borrowers retain sufficient financial capacity to meet their daily living needs, while also preventing potential defaults from the outset.
This tightening of regulation is not without justification. OJK recorded that, as of November 2025, there were 24 P2P lending operators with non-performing loan risk levels (TWP 90) exceeding 5%, the majority of which were concentrated in the productive lending segment. This condition signals the need to strengthen credit assessment quality within the P2P lending industry.
In addition to the debt ratio regulation, credit scoring assessments are now increasingly linked to the implementation of Know Your Customer (“KYC”) procedures and the utilization of the Financial Information Service System (Sistem Layanan Informasi Keuangan or “SLIK”). Initially, POJK No. 18/POJK.03/2017, as lastly amended by POJK No. 11 of 2024 on the Reporting and Request for Debtor Information through the Financial Information Service System, stipulates that P2P companies may be SLIK reporting entities. This means that it is not mandatory obligations, but P2P companies are welcome to be SLIK reporting entities. However, as of 31 July 2025, OJK mandates the P2P companies to be SLIK reporting entities. The P2P companies must report the debtor’s data in a complete, accurate, and monthly manner.
SLIK, formerly known as BI Checking, facilitates the comprehensive credit history review of prospective borrowers for prospective creditors. As P2P Companies are now mandated to report debtor data, non-performing debtors will be recorded in SLIK, serving as a reference for other creditors, including other P2P companies, in conducting assessments of the debtor’s creditworthiness.
Commentary
In response to the stringent implementation of credit scoring regulations, mandatory SLIK reporting, and intensified Know Your Customer (KYC) requirements, the likelihood of uncollectible loans is anticipated to diminish. Borrowers who successfully navigate the selection process are those who are deemed to possess robust financial well-being and adopt a more prudent approach to managing debt obligations.
Once the NPLs in P2P companies have been diminishing due to better screening of non-eligible borrowing applications, the capped maximum interest rate in P2P sectors, as borrower risk becomes more measurable and controlled may be revisited. This development represents a win-win solution, while the P2P lending industry becomes healthier and more sustainable, the borrowers gain access to safer and more responsible financing.
For Further Information, Please Contact:
MetaLAW, Legal Consultant, Jakarta, Indonesia
general@metalaw.id
