Pindar's Debt Reaches Rp 77.07 Trillion By The End Of 2024

The Financial Services Authority (OJK) reported that the outstanding amount for peer-to-peer (P2P) lending in fintech reached IDR 77.07 trillion in December 2024. This figure shows an increase from IDR 59.64 trillion in December 2023, marking a year-on-year growth of approximately 29.2 percent. On a monthly basis, the outstanding amount rose by 1.95 percent in December 2024 compared to IDR 75.60 trillion in November 2024. "Bank funding in December 2024 accounted for 60 percent of P2P lending financing, which is an increase from 59 percent in November 2024, with digital banks leading the funding," stated Dian Ediana Rae, the Executive Director of Banking Supervision at OJK, in a written statement on Sunday (February 23, 2025).

The dominance of bank funding in P2P lending amid the rise of problematic fintech has raised concerns about a potential surge in non-performing loans (NPL) for banks. However, Dian reassured that, so far, this situation has not significantly impacted the NPL rates in the banking sector. Nonetheless, OJK will continue to monitor and conduct thorough inspections, urging banks to enhance their risk management and governance practices when lending to P2P fintech companies.

Among the measures, OJK has requested banks to carry out comprehensive evaluations of all partnerships with P2P fintech companies, including assessing the performance and viability of these fintech partners, as well as strengthening oversight of credit distribution through these platforms.

If a bank notices a significant rise in non-performing loans (NPL), the Financial Services Authority (OJK) instructs the bank to temporarily stop lending to or through P2P lending fintech companies. The bank must also assess its business model in collaboration with these fintech firms. For loans provided through channeling, banks are required to review their Risk Acceptance Criteria (RAC) and the analysis process for lending to end users, ensuring that the loans are granted in line with prudent banking principles. The OJK will continue to monitor the plans and actual lending to P2P fintech companies in 2025 to prioritize prudent banking practices and mitigate the increase in credit risk.

Tag: Dian Ediana Rae Financial Services Authority OJK