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We set out below a summary about Provisions of Multifinance Company in Indonesia based
on the regulation in Indonesia.
GENERAL
2. Pursuant to article 1 poin 1 POJK 35/2018, Multi Finance Company (“MFC”) is:
LICENSE PROCESSING
3. The MFC shall and must have a business license from OJK to do business activities in
Indonesia jurisdiction. (article 3 POJK 28/2014)
4. Pursuant to article 2 POJK 28/2014, The company must be established by legal bodies
in a form of Limited Liability Company (Perseroan Terbatas – PT) which shares can
be owned by:
a. Indonesian Nationals
b. A legal Indonesian Companies or Institution.
c. Foreign Companies or Institution
d. Foreign Nationals (can only be done through capital market)
e. State of Republic of Indonesia
f. Regional Governments
5. Directors shall submit the business license application (by using OJK forms) by
attaching following documents such as:
a. Deed of Establishment, with at least consist of:
1) Name & Business Domicile Place
- the name shall consist “finance” or “pembiayaan” words (article 7 POJK
28/2014)
2) Description and purpose of business
3) Capital
- For PT, the amount of capital that must be deposits is at least Rp
100.000.000.000,00 (one hundred billion rupiah). (article 9 POJK 28/2014)
- Maximum total amount of alien/foreign ownership in PT company is 85%
from the deposited capital. (article 10 POJK 28/2014)
4) Owner
5) Authority. Responsibility, the period of time of the directors and commisioner
position
And/or the amendment of Article Of Association (“AOA”) with the confirmation,
approval and/or notification from the authorities.
b. List of owners, in a forms of shareholders list with the amount of shares that owned
by the shareholder.
c. Shareholders data:
1) If it is a person, the company shall attach the shareholders data with:
- Copy of Identification Card (ID or passport)
- Copy of Tax Obligation Number (Nomor Pokok Wajib Pajak – NPWP)
- Curriculum Vitae with an updated photo with a size of 4 x 6 cm.
- Statement letter that states that the stored capital in the company is not
from loan, money laudering activity, not listed on bad debt and list of failure
person (Daftar Tidak Lulus – DTL), Never sentenced by the court because of
harming the state finances and/or related financial sectors in past 5(five)
years, never found guilty which implicates the company is stated bankruptcy
by the legally court verdict in past 5(five) years, never stated against
regulations regarding finansial service which he/she already done.
ORGANIZATION STRUCTURE
6. Pursuant to article 14 POJK 28/2014, The MFC shall have an organization structure
which draws clearly with along at least in fuction of:
a. Administration and bookkeeping
b. Marketing, analysis an appropriateness of financing and collection.
c. Risk management, including internal control
d. Application of understanding customers principles
7. The structure organization shall be completed with a description of their job, authority,
responsibility and legitimate working procedures.
BUSINESS ACTIVITIES
9. The MFC is required to clearly describes their business activities on the Articles Of
Association (AOA). (article 7 POJK 35/2018)
FINANCING METHODS
10. The Financing Activities on MFC shall be done with the following methods as stipulates
under the POJK 35/2018 which is :
a. Lease Financing (only for Investment Financing & Multipurpose Financing)
b. Sale and Lease Back (only for Investment Financing & Working Capital Financing)
c. Factoring with a guarantee from the receivables/claim seller (only for Investment
Financing & Working Capital Financing)
d. Factoring without a guarantee from the receivables/claim seller (only for Investment
Financing & Working Capital Financing)
e. Purchase with installment payment. (only for Investment Financing & Multipurpose
Financing)
f. Project financing (only for Investment Financing)
g. Infrastructure financing (only for Investment Financing)
h. Business capital facilities (only for Working Capital Financing)
i. Funds Facilities (only for Multipurpose Financing)
j. Other financing methods ( after get an approval from OJK)
11. The MFC who wants to do other financing business and methods activities shall meet
the following requirements as stipulates under the POJK 35/2018 which is:
a. A plan for doing other business and methods activities which already included on the
MFC Business Plan.
b. Have a financial health level with healthy minimum conditions.
c. Have a low levels of minimum risk
d. Meet the gearing ratio standard/provision
e. Have a minimum equity at least Rp. 200.000.000.000,00 (Two Hundred Billions
Rupiah)
f. Not being penalized by OJK
g. Shall submit an application to OJK to get an approval and must attach/submit a
document with a minimum descriptions about:
1
Explanations on POJK 35/2018 https://ojk.go.id/id/regulasi/Documents/Pages/Penyelenggaraan-Usaha-
Perusahaan-Pembiayaan/pojk%2035-2018.pdf
2
Ibid.
1) The product that will be marketed.
2) Business prospect analysis.
3) Financing mechanism/methods that will be implemented.
4) Rights and Obligations for both parties.
5) Example of Financing Agreement that will be used.
12. The MFC who wants to do fee service activities shall reports the OJK with an attachment
at least about:
a. Description about the product of fee service that will be
b. Description about the marketing mechanisme
c. Description about the rights and obligations for both parties
d. Draft of cooperation agreement
e. A copy of license from the authorities who have an authority (if any)
13. Pursuant to article 18 POJK 35/2018, the MFC is required to have Integrated
Information System and Technology. (the obligation only applies for the MFC Company
who have more than 5 branches)
14. Pursuant to article 19 POJK 35/2018, the MFC could doing their business activities by
using information technologies with a following requirements which is:
a. Have a Standard Operating Procedure (SOP) regarding business activities by using
information technology.
b. Have human resources which have expertise and/or background in information
technology field.
c. Have data centre and disaster recovery centre placed in Indonesia.
d. Have a reliable and secure information technology system.
COOPERATION
15. In doing the MFC business activities, the MFC could cooperates with other parties
through channeling or joint financing and shall be done pursuant to regulation
provisions that applies to both sides. (article 39 poin 1 & 2 POJK 35/2018)
16. The MFC is prohibited to doing a cooperation with other parties through channeling
with recourse and joint financing with recourse. (article 39 poin 1 & 2 POJK 35/2018)
With a condition that other parties is already licensed and registered in OJK.
18. Channeling is only can be done by the MFC if the risk is arising from this activity lies for
the owner of the fund. (article 40 poin 1 POJK 35/2018)
19. On channeling, the recipient only act as an administrator and obtain their rewards from
funds managing. (article 40 poin 2 POJK 35/2018)
20. Joint financing is only can be done by the MFC if the souce of financing fund is from the
MFC and other parties. (article 41 poin 1 POJK 35/2018)
21. The risk that is arising from joint financing become a burden proportionally suitable to
amount of funds issued. (article 41 poin 2 POJK 35/2018)
22. In doing a financing cooperation through channeling and/or joint financing, the MFC
shall have reliable Information System and Technology to ensure the appropriateness of
debtor data owned by the MFC and other parties. (article 42 POJK 35/2018)