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Business trends

Indonesian finance body blocks 297 unregistered P2P lenders

Number of unlicensed platforms charging excessive interest rates is growing fast

Most of the 297 illegal fintech applications were from inside Indonesia, but several were hosted on servers outside the country.   © AP

JAKARTA -- The investment alert unit at Indonesia's Financial Services Authority, known as OJK, along with the IT ministry and local police force, has identified and blocked 297 illegal peer-to-peer lending platforms and one cryptocurrency platform. None of the blocked sites are properly registered with OJK.

Tongam Lumban Tobing, chief of the OJK's investment alert unit, said most of the illegal fintech applications that been found were from Indonesia, but the team also found several entities hosted on servers outside Indonesia.

Anthonius Malau, acting director of informatics application control at the IT ministry, revealed that the ministry was flagging up suspicious fintech platforms every day. Whenever a new entity is identified, the OJK's investment alert unit is notified for further verification.

"Once a fintech platform has been verified as illegal, we will directly block it. By blocking these illegal platforms, we hope to protect the consumers and public," Malau said in a press statement.

This year, authorities in Indonesia have blocked 1,369 illegal lending platforms so far -- a drop from the 1,773 unlicensed platforms that were banned in the first 10 months of last year.

Illegal P2P fintech platforms have been springing up in Indonesia since 2017. Some of these unlicensed platforms charge excessively high interest rates and essentially function as loan sharks. There is also a concern that unregulated fintech portals may abuse the personal information of its users.

KrASIA is a digital media company focused on technology-driven businesses and trends across the Asia-Pacific region. It is part of 36Kr, a tech news portal based in Beijing. Nikkei has a minority stake in 36Kr.

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