Indonesia’s Financial Services Authority (OJK) said online lending volumes climbed 22.01% year-on-year in July, even as it tightened enforcement across the financing sector with fresh sanctions on dozens of institutions.
Total peer-to-peer (P2P) loan disbursements reached Rp84.5 trillion ($5.3 billion) in July, up from Rp83.5 trillion in June, OJK data showed.
The steady rise underscores growing demand for digital lending, which has expanded sharply from Rp59.4 trillion in December 2023 and Rp69.39 trillion by July 2024.
“Digital lending continues its upward trend, reflecting resilience in consumer demand and financing activities,” said Agusman, Executive Head of OJK’s Supervisory Agency for Financing Institutions, Venture Capital Companies, Microfinance Institutions and Other Financial Institutions (PVML).
In August, OJK imposed administrative sanctions on a wide range of financial entities, including 24 financing companies, 5 venture capital firms, 19 online lending platforms, 28 private pawnshops, one special financial institution, and 8 microfinance firms.
The sanctions comprised 32 fines and 129 written warnings, targeting violations ranging from operational mismanagement to breaches of consumer protection rules.
OJK said the stepped-up action was aimed at ensuring greater compliance and safeguarding borrowers amid rapid sector growth.
The regulator noted that industry risks showed marginal improvement. The 90-day non-performing loan (NPL) ratio fell to 2.75% in July from 2.85% in June.
“Overall conditions remain stable,” Agusman said, highlighting that receivables from financing companies rose 1.79% year-on-year to Rp502.95 trillion, supported by an 8.86% increase in working capital financing.
OJK has sought to balance industry expansion with tighter consumer safeguards, as online lending platforms attract millions of borrowers.
“We are strengthening enforcement to uphold compliance and consumer protection in the PVML sector,” the agency said in a statement.
The regulator’s twin-track approach, encouraging financing access while clamping down on violations, comes as Indonesia’s fintech market plays a growing role in household and small business credit.
