OJK Strengthens Fintech Lending with New Credit Insurance Program

Enhancing Ecosystem Stability

The Financial Services Authority (OJK) has officially launched a specialized credit insurance program for the fintech lending industry, marking a significant step towards strengthening the sector's ecosystem. This new initiative aims to mitigate inherent risks in peer-to-peer (P2P) lending while promoting a healthier and more sustainable industry growth ¹

Key Features of the Insurance Program

The credit insurance program is designed to provide an additional layer of protection for lenders participating in P2P lending platforms. According to Ogi Prastomiyono, Head of Insurance, Guarantee, and Pension Fund Supervision at OJK, the insurance is not mandatory but is expected to become a crucial risk management tool for industry players. The program is initially targeted at institutional lenders and is planned to be expanded to include retail lenders in the future ¹

Regulatory Considerations

Ogi emphasized that the insurance program's implementation will require careful consideration of several regulatory aspects. These include premium loading for risk-bearing parties, risk-sharing arrangements, robust information systems, comprehensive risk assessment, and accurate claim analysis. The insurance premium is expected to be part of the economic benefits cost for P2P lending with a coverage period of approximately 12 months ¹

Industry Impact and Future Development

Agusman, Head of Supervision for Financing Institutions, Venture Capital Companies, Microfinance Institutions, and Other Financial Services at OJK, highlighted that this insurance program will have significant benefits for the sustainability of the P2P lending industry. The introduction of this program is expected to foster better risk mitigation practices and promote the overall health of the fintech lending sector ¹