The Financial Services Authority (OJK) has officially regulated information-technology based money lending services (LPMUBTI). This is expressed in OJK Regulation No. 77/POJK.01/2016. The regulation is expected to boost the growth of the LPMUBTI or Fintech's Peer-to-Peer (P2P) Lending industry and become the new financing alternative for the public.

The regulation was issued following the rapid increase of Fintech startups founded in 2016; last year alone, their number rose threefold. In 2016's first quarter, there were about 51 fintech companies, and by the fourth quarter, the figure had soared to 135.

Such speedy growth surely needs to be anticipated, in order to protect consumers' interests in relation to the security of their funds and data, and for the sake of national interests concerning prevention against money laundering and terrorism funding, and financial system stability.

According to Imansyah, OJK Deputy Commissioner for Strategic Management IA, as part of their efforts to support the National Strategy of Financial Inclusion (SNKI), P2P Lending providers are expected to open access to loans, both from overseas and various areas in Indonesia. In addition, the OJK would like to see those providers play a role in improving equality and accelerating distribution of financing to Micro, Small and Medium Enterprises (MSMEs).

"This OJK Regulation is in line with the many efforts that the Regional Financial Access Acceleration Teams (TPAKD) have undertaken. Moreover, it supports the Nawacita vision (the government's nine-point development program), the 1,000-startup Movement, and the recently-announced 14^th economic policy package," Imansyah said at a press conference held at the Soemitro Djojohadikusumo Building in Jakarta.

In its implementation, OJK Regulation No. 77/POJK.01/2016 imposes provisions on registration and licensing. It requires providers to register themselves prior to submitting any applications. During registration period, providers are allowed to operate in full scale—with counseling from the OJK. Further, providers are also required to apply for their licenses from the OJK no later than one year after they are registered at the Authority.

On the other hand, to protect consumers' interests, providers are required to use escrow and virtual accounts in banks and set up data centers within the country. Further, the maximum amount of money that a provider can lend to a customer is limited to IDR 2 billion, in order to protect national financial system's stability.