Five Ministries/State Institutions Agree to Strengthen Measure to Eliminate Illegal Fintech Lending

By Office of Assistant to Deputy Cabinet Secretary for State Documents & Translation
Date 23 Agustus 2021
Category: News
Read: 67 Views

Signing of joint statement on illegal fintech lending eradication, Friday (20/08) (Source: PR of Financial Services Authority)

Five ministries / state institutions have renewed their commitment to strengthen measures to eradicate rampant illegal fintech lending platforms that disadvantage people.

The commitment is manifested in the joint statement of the leaders of the five ministries / state institutions, namely Head of the Board of Commissioners of the Financial Services Authority (OJK) Wimboh Santoso, Governor of central bank Bank Indonesia Perry Warjiyo, Chief of the Indonesian National Police General Listyo Sigit Prabowo, Minister of Communications and Informatics Johnny G. Plate, and Minister of Cooperatives and Small and Medium Enterprises Teten Masduki, made on Friday (20/08).

This joint statement is aimed to improve concrete actions taken by each ministry / state institution in eradicating illegal fintech lending in accordance with their authority to protect the people.

According to Head of OJK Board of Commissioners Wimboh Santoso, his institution has implemented various policies to eliminate illegal fintech lending through the Investment Alert Task Force (SWI), including by carrying out many programs to educate the people to use fintech lending registered or authorized by the OJK and to prevent the people from using illegal fintech lending.

“We appreciate other measures taken by all members of SWI, including carrying out cyber patrols, regularly blocking fintech lending sites and applications, disciplining saving and loan cooperatives that offer online lending, prohibiting payment gateway, and taking legal action on illegal fintech lending,” he said.

Wimboh went on to say that the OJK has also received a positive response from Google for requesting to cooperate in setting requirements for private lending applications in Indonesia which are often misused by illegal fintech lending platforms.

As of 28 July 2021, he added, Google has added a new requirement for private lending applications, namely a license document or OJK-registered proof.

Wimboh also underscored that the preventive and curative measures in managing illegal fintech lending must not stop here and all members of the SWI must build an integrated and structured system to tackle the massive offers of illegal fintech lending.

“Together, we must eradicate illegal fintech lending because illegal fintech lending players cast a burden on and disadvantage the people. Moving forward, the OJK, Bank Indonesia, Ministry of Communications and Informatics, Ministry of Cooperatives and SMEs, and the National Police must implement more effective, more structured, and better-planned strategies to eliminate illegal fintech lending, which we are carrying out together with this joint statement,” he said.

Echoing a similar sentiment, Governor of Bank Indonesia Perry Warjiyo stated that his institution is committed to and fully support all joint measures to maintain the financial sector to keep growing and contributing positively and effectively for economic recovery.

“Illegal fintech lending is an activity outside the financial system that not only disturbs the activities of financial institutions in reviving national economy that we continue to strive for, but also causes many legal and social issues,” he said.

Perry added that Bank Indonesia is also committed to always becoming a strategic partner in the interinstitutional synergy in implementing policies without being disturbed by negative business practices, such as illegal fintech lending.

Meanwhile, Minister of Communications and Informatics Johnny G. Plate stated that the development of financial technology, especially peer-to-peer lending or online lending platforms, is something that people should be proud of but must respond to carefully.

“However, we must remain vigilant because since 2018 until 17 August 2021, Ministry of Communications and Informatics has terminated access to 3,856 contents about fintech that violate the law, including those about unauthorized / illegal online lending platforms,” he said.

Johnny also expressed appreciation on the joint statement initiative to strengthen commitment to eradicate illegal fintech lending activities and to strengthen consumer protection in Indonesia.

“We call for and are certainly ready to stand with related ministries and state institutions, particularly the OJK, Bank Indonesia, Ministry of Cooperatives and SMEs, and the Indonesian National Police, and stakeholders in the private sector to realize a positive and safe online lending ecosystem that benefits the people and boosts national economy,” he remarked.

In the meantime, Minister of Cooperatives and SMEs Teten Masduki stressed that illegal fintech lending activities that use the name of saving and loan cooperatives (KSP) can worsen the image of cooperatives.

Therefore, he added, Ministry of Cooperatives and SMEs has cooperated with the SWI to stop illegal fintech lending activities that use the name of KSP.

Teten added that his Ministry has also carried out a number of educational programs for cooperatives and the people to anticipate illegal fintech lending platforms that use the name of cooperatives, such as Reinforcement of Cooperative Fostering Functions, Reinforcement of Cooperative Monitoring Functions, and Improvement of KSP Literacy, which are aimed to raise public awareness of cooperatives’ values.

“Illegal fintech lending platforms are getting rampant and they inflict a huge loss on the people, especially amid the COVID-19 pandemic. This joint commitment is a concrete action of synergy among ministries / state institutions for the prevention, management, reporting, and law enforcement of illegal fintech lending,” he said.

Commenting on the joint commitment, Chief of the National Police General Listyo Sigit Prabowo said that between 2018 and 2021, the police has taken 14 law enforcement measures on illegal fintech lending with various modi operandi that disadvantage the people.

Therefore, he added, a guide for those who cooperate to protect the people from illegal fintech lending offers and to strengthen measures to eradicate illegal fintech lending is required.

“This joint statement shows the state’s presence amid the people to give them a sense of safety, especially those who experience economic pressure due to the COVID-19 pandemic,” he remarked.

The joint statement of the five ministries / state institutions is as follows:

In order to increase public awareness of illegal fintech lending and to strengthen measures to eradicate illegal fintech lending, and based on the Memorandum of Understanding on Coordination of Prevention and Management of Alleged Unlawful Acts involving Public Fund Collection and Investment Management, the Financial Services Authority, Bank Indonesia, the Indonesian National Police, Ministry of Communications and Informatics of the Republic of Indonesia, and Ministry of Cooperatives and Small and Medium Enterprises of the Republic of Indonesia issue the following Joint Statement:

A. Prevention

  1.  Improving financial literacy and carrying out communication programs actively and comprehensively to increase public awareness of illegal fintech lending offers;
  2. Improving educational programs for the people to increase caution in applying for online loans and to protect personal data;
  3. Promoting cooperation with institutions and application developers to prevent the spread of illegal fintech lending through applications and mobile network providers to spread information for public awareness of illegal fintech lending;
  4. Prohibiting banks, non-bank payment service providers, aggregators, and cooperatives to cooperate or facilitate illegal fintech lending and obligating them to implement the Know Your Customer principle as per the prevailing law.

B. Public Complaint Management

  1. Opening access for public complaints;
  2. Taking follow-up actions on public complaints in accordance with the authority of each ministry/institution and/or reporting the issue to the Indonesian National Police for law enforcement.

C. Law Enforcement

  1. Taking legal actions on illegal fintech lending actors in accordance with the authority of each ministry/institution;
  2. Making international cooperation in order to eradicate cross-country illegal fintech lending operations.

Follow-up actions of this joint statement will be taken with Cooperation Agreement on Illegal Fintech Lending Eradication that will include measures from each ministry / institution coordinated by the SWI.

This measure requires public participation to break the chain of illegal fintech lending traps. The people are advised to only use fintech lending platforms registered with the OJK listed on https://bit.ly/daftarfintechlendingOJK.

The people are also asked to report cases of illegal fintech lending through https://patrolisiber.id website and info@cyber.polri.go.id. Reports can also be sent to the OJK through the Call Center (157), WhatsApp (081157157157), and email (konsumen@ojk.go.id or waspadainvestasi@ojk.go.id), or to the Ministry of Communications and Informatics through website (aduankonten.id), email (aduankonten@kominfo.go.id), and WhatsApp (08119224545). (DH/EP)

Latest News