Indonesia Advances Insurance Solutions for Fintech Lending Sector

Regulatory Push for Risk Mitigation

The Indonesian financial regulatory landscape is witnessing significant developments in the fintech lending sector, particularly with the introduction of insurance products designed to mitigate risks associated with peer-to-peer (P2P) lending. The Financial Services Authority (OJK) is at the forefront of this initiative, working closely with insurance companies to develop a specialized insurance product for fintech lending platforms ¹

Industry Collaboration and Challenges

The development process involves multiple industry stakeholders, including the Indonesian General Insurance Association (AAUI) and the Fintech Lending Association (AFPI). According to Budi Herawan, Chairman of AAUI, the discussions are ongoing, with a focus on creating a consortium-based insurance scheme that can effectively manage the risks associated with fintech lending ¹

Recent incidents, such as the issues faced by PT Dana Syariah Indonesia (DSI), have highlighted the need for such insurance products. DSI, a Syariah-based P2P lending platform, experienced significant delays in returning funds to lenders, with outstanding amounts reaching Rp 1.5 trillion as of November 18, 2025 ²

Key Features of Proposed Insurance Product

The proposed insurance product is expected to feature a risk-sharing mechanism, similar to existing credit insurance schemes. Entjik S. Djafar, Chairman of AFPI, noted that the discussions are still ongoing, with a focus on determining the appropriate insurance scheme and pricing ¹

Ogi Prastomiyono, Head of Insurance, Guarantee, and Pension Fund Supervision at OJK, emphasized the importance of ensuring that the insurance coverage accurately reflects the risk profile of the fintech lending ecosystem. This includes considering factors such as loan disbursement patterns, borrower characteristics, and loan durations ¹

Implications for Fintech Lending Ecosystem

The introduction of insurance products for fintech lending is expected to enhance the stability and trustworthiness of the P2P lending market. By providing a safety net for lenders, these products can potentially increase investor confidence and promote further growth in the fintech lending sector.