Indonesia’s Financial Services Authority (OJK) has identified as many as 227 peer-to-peer (P2P) lending platforms operating in the country without a licence.
These P2P lending platforms are being operated by 155 unlicensed fintech companies, more than half of which are from China.
“It could be that each of them have 3-5 platforms,” said chairman of the OJK’s investment alert task force, Tongam L. Tobing.
A quick search on Google Play shows developers with Chinese names such as LiChen, Tupulian, Xiehualei offering lending apps using Indonesian names such as Dompet Pinjaman (loan wallet), DompetKamu (your wallet) and Duit Instan (instant cash]).
The number of illegal P2P lending platforms far outnumber the 64 registered P2P firms in the country.
In a press briefing on Friday, Tobing told reporters that the OJK had on February 19 summoned all fintech players to urge all of them to register with the OJK. However, the 227 unlicenced lenders did not respond and many of them did not have mailing address.
Tobing said, the OJK will work with other related institutions to ensure that required action is taken against the companies, should they continue to be non-complaint.
“If they continue to ignore us, we have set up a partnership with the Communications and Information Ministry and Google to block them as well as hand their data to the National Police’s Criminal Investigation Department [Bareskrim] for further investigation,” said Tobing.
According to Tobing, the influx of Chinese-origin P2P platforms into Indonesia is likely prompted by Chinese government’s tightening measures on curbing illegal financial technology (fintech).
In China, 118 platforms have fallen through, according to Shanghai-based Yingcan Group. This has forced to impose firmer clampdown on shadow banks which started in early 2016, when a record 230 P2P lenders failed in August of that year.
In recent months, there has been renewed pressure after China’s credit markets tightened and the regulator warned savers that they should be prepared to lose all their money in high-yield products.
China’s P2P platforms have about 50 million registered users and 1.3 trillion yuan ($192 billion) of outstanding loans.