Peer to Peer Lending Consumer Protection

v. Conventional Bank Credit Regulation

Analysis on P2P Lending Consumer Protection Regulation by
Comparing to Conventional Bank Credit Regulations in Indonesia

Felula Salma Desfealucy

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 Structure of
Presentation

1 2 3 4

Key Issues and Peer to peer lending v.

Understanding
Peer to peer lending and
Consumer protection issues
in Indonesia
Analysis Conclusion
Conventional Credit
Consumer protection Prudential principle, asset quality
legal basis risk management, and credit policy,
 Research Method
• Juridicial Normative Research

• Secondary Sources

• Interview with Ivan Tambunan, CEO of Akseleran & attended Tech in Asia Conference 2018
 Peer to Peer Lending Consumer Protection
Issues in Indonesia
Key
Understanding • Unlawful debt collecting practice: Harassment, threat, defamatory,
personal data breach

and Issue
• High and unlimited interest
• Collection of personal data from borrower’s phone
• Complaint number listed by the p2p platform is not always
available
1. How does the consumer protection regulation in Peer to Peer
• Unclear address of the platform
Lending differs with lending in Conventional Bank in Indonesia?
• Platform change its name for days without giving notice to the
2. How should peer to peer lending be regulated in protecting consumer.
consumers by referring to Conventional Bank Credit regulations?
LBH Jakarta received over 1,330 complaints
from November 4 2018
 - P2P Platforms are Indonesian legal entity that
provides, manage, and operate P2P Lending
Services.
Peer to Peer - Consumers are both borrower and lender of the P2P
Lending Lending Services.
- Legal basis: OJK Regulation Number 77 Year 2016
on Peer to Peer Lending
 Available Regulations and Efforts
1. Law Number 8 Year 1999 on Consumer Protection: Umbrella Law
2. Law 21/2011 on Financial Service Authority: OJK function as
supervisory
3. OJK Regulation No.77/POJK.01/2016 on Peer to Peer Lending:
Obligation to provide accurate, honest, clear, and reliable
Peer to Peer information. SOP on user data and/or information transfer to third
party

Lending 4. OJK Regulation No. 13/POJK.02/2018 on Financial Technology

on Financial Service Sector: Regulatory Sandbox

Consumer 5. OJK Circular Letter No.18/SEOJK/02/2017 on Information

Technology Risk Management and Governance on Peer to Peer

Protection Lending: Risk mitigation of electronic system and information

technology
6. Law Number 11 Year 2008 on Electronic Transaction and
Information and Ministry of Communication and Information
Regulation No. 20 Year 2016 on Personal Data Protection in
Electronic System: Personal data protection
7. OJK Fintech Center, AFTECH, AFPBI
 Conventional
No. Protection Peer to
loan
peer
lending
1. Principles Yes Yes

2. Risk Managent No Yes

3. Asset Quality No Yes Peer to Peer Lending

Consumer Protection
4. Bank Credit No Yes
Policy v.
5. Good No Yes Conventional Credit
Corporate Consumer Protection
Governance
6. Guarantee and No Yes
Collateral
7. Legal Lending Yes Yes
Limit
8. Personal Data Yes Yes
Protection
9. Dispute Yes Yes
Settlement
Analysis on How P2P Lending Consumer Protection be
Regulated Compared to Conventional Credit Regulation

1. Prudential Principle 2. Asset Quality

In addition to transparency principle that is
highlighted in peer to peer lending, • Bank Indonesia Regulation Number 14/15/PBI/2012
prudential principles shall be intensified. on Asset Quality
1. 5C Principles • Loan Restructuration: Obligation to create
2. 7P Principles guidelines, and policy on its execution.

3. 3R Principles • Evaluating borrower issues, projected cashflow,

present value, purpose, and schedule to pay back
the loan.

• Credit quality
Analysis on How P2P Lending Consumer Protection be
Regulated Compared to Conventional Credit Regulation

3. Risk Management 4. Credit Policy

• OJK Regulation Number 18/POJK.03/2016 • OJK Regulation Number 42/POJK.03/0217 on the Obligation to
on Implementation of Risk Management for Assemble and Execute Credit Policy or Financing Policy for
Conventional Bank Conventional Bank

• To address the issue of non-performing • Scope:

loan as well as debt-collecting practices
• Prudential principle
• Risk management on compliance risk and
• Organization and management of Credit
legal risk to ensure platforms will execute
its business accordingly to applicable laws • Provisions regarding to Credit Approval

and regulations • Documentation and administration of credit

• Supervision of credit

• Solution for non-performing loan

Key Consideration
Peer to peer lending regulations shall not
simply mirror conventional credit regulations
1. Balance between regulation and innovation
2. Prevention of shadow-banking
3. Different consumer as conventional credit
 Conclusion
- The existing Indonesian laws and regulations on peer to peer
lending has not provide sufficient provisions on
consumer protection to protect both borrower and
lenders’ interest, if compared to Bank Conventional Credit
Regulation.

- In seeking reference from conventional loan, peer to peer

lending laws and regulation shall not simply mirror banking
law and regulations on conventional loan.

Conclusion - Aspects that can be referenced: Prudential principles, risk

management, asset quality, and credit policy.

& Suggestion - Suggestion

1. Indonesian government shall promulgate regulations that
intensify consumer protection in peer to peer lending.

2. Intensifying OJK advisory function.

3. Highlighting the importance of supplementary bodies plays

an important role.
Thank you