OJK Clarifies Role of Credit Insurance in P2P Lending Ecosystem

Regulatory Framework for Credit Insurance

The Financial Services Authority (OJK) has issued a clarification regarding the role of credit insurance in the peer-to-peer (P2P) lending ecosystem. According to Ogi Prastomiyono, OJK's Executive Head of Insurance, Guarantee, and Pension Fund Supervision, the presence of credit insurance for P2P lending does not absolve P2P lending organizers of their risk management responsibilities. The regulation, as outlined in POJK 40/2024 concerning Technology-Based Collective Funding Services (LPBBTI), mandates that credit insurance must cover a significant portion of default risks while adhering to sound insurance principles.

Key Requirements for Credit Insurance Implementation

1. Comprehensive Risk Coverage: Credit insurance must cover most default risks
2. Sound Insurance Principles: Implementation must maintain good faith and reasonable insurance practices
3. Claims Processing: Allows claims since funding quality is categorized as doubtful or bad
4. Consortium Approach: OJK has approved the formation of an insurance consortium for P2P lending credit insurance
5. Ongoing Monitoring: Insurance companies must continuously monitor performance, claim rates, and premium adequacy

Implementation Timeline and Approach

The implementation of credit insurance for P2P lending began in December 2025 with a phased and measured approach. Ogi Prastomiyono explained that this approach includes pilot implementation and continuous evaluation of effectiveness, risks, and impacts. The regulation emphasizes that insurance companies must comply with multiple regulatory requirements, including POJK 8/2024 on Insurance Products and POJK 20/2023 on Credit Insurance.

Regulatory Compliance and Risk Mitigation

To ensure effective risk mitigation, insurance companies offering credit insurance for P2P lending must meet several regulatory requirements:

1. Liquidity and Capital Adequacy: Companies must demonstrate sufficient financial capacity
2. Information Systems: Robust systems for risk assessment and management
3. Human Resources: Adequate skilled personnel for risk management
4. Governance: Strong corporate governance framework
5. Prohibition on Stop Loss Mechanisms: As mandated by POJK 40/2024

The OJK's regulatory framework aims to balance the development of the P2P lending market with robust consumer protection and risk management practices. By implementing these measures, the authority seeks to create a more stable and secure environment for both lenders and borrowers in the P2P lending ecosystem.