Fintech NPLs Under Control, According To Financial Authority – Business
News Office (The Jakarta Post)
Mon 22 October 2018
The Financial Services Authority (OJK) said the non-performing loan (NPL) rate among financial technology (fintech) firms that use peer-to-peer (P2P) lending was hovering around 1% per month, below 2% maximum set by the OJK.
“The NPL rate can go down to 0.9, then go up to 1.3 and then back down,” Hendrikus Passagi, OJK’s director of fintech licensing and oversight, said Sunday, as reported by Kompas.com.
Hendrikus attributed the fluctuation to the emergence of new fintech lenders each month who, having less experience, did not handle non-performing loans as effectively as older lenders.
âBut new lenders learn quickly and their NPL rates drop again within three months,â he said.
He added that the OJK required all registered fintech companies to regularly report their NPL rate to their organization, to be used as an indicator of industry performance, although higher NPL rates were not as high. âRelevantâ to P2P-based fintech companies versus banks, for which the NPL limit is 5%.
Fintech NPL transparency and mandatory registration are just two examples of the regulations the OJK has applied since 2016 to protect Indonesian consumers from fraudulent fintech companies.
Witnessing the explosive growth of fintech in Indonesia, the OJK predicts that the amount of funds distributed by fintech will almost triple to 20,000 billion rupees ($ 1.31 billion) by December, from just 7,000 billion rupees in June. (or)