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Indonesia’s Financial Services Authority, known as OJK, has shutdown 826 fintech startups so far in 2019 for operating without a license. 90% of Indonesians don’t carry credit cards, and most have no access to formal banking services, but positive signs like the nation’s internet economy being the fastest growing in the region give hope that fintech innovations will improve those stats.
The illegal fintech firms often charged exorbitant interest rates and resorted to unethical recovery practices considered criminal in nature, National Police spokesman Dedi Prasetyo said. The police have come across cases of borrowers being threatened and persecuted, driving them into fear and depression, he said. The public should not fall prey to offers of easy loans and not share personal data with fintech firms operating without licenses, he said. “What makes the fintech firms thrive is because the society is still easily tempted by offers of loans with less hassles,” OJK’s [Tongam L. Tobing, chief of investment watchdog,] said.
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