OJK Introduces Simplified Licensing for Pawnbroking Businesses

New Regulatory Framework for Pawnbroking Sector

The Financial Services Authority (OJK) has issued OJK Regulation (POJK) No. 29/2025, amending previous regulations (POJK No. 39/2024) regarding pawnbroking businesses. The new regulation simplifies the business licensing requirements for pawnbroking operators, aiming to bring more businesses under formal supervision.

Key Provisions of the New Regulation

The new POJK requires entities operating pawnbroking businesses at the regency/city level to obtain an OJK license. Existing operators must demonstrate initial capital of Rp500 million to be eligible for licensing. This capital requirement is a crucial step in formalizing the pawnbroking sector. The regulation was effective from its promulgation date on December 1, 2025, until January 12, 2026.

Industry Reaction to the New Regulation

PT Indonesia Gadai Oke, a player in the pawnbroking industry, has welcomed the new regulation. According to Danioko Sastra Sembiring, Director of PT Indonesia Gadai Oke, the new POJK is a positive development as it encourages unlicensed pawnbroking businesses to formalize their operations. However, Sembiring also emphasized that obtaining a license is not merely about meeting the capital requirement. License applicants must also demonstrate good corporate governance, quality customer service, effective risk management, and regulatory compliance.

Implications for the Pawnbroking Sector

The new regulation is expected to have several impacts on the pawnbroking industry. Firstly, it will lead to increased formalization of the sector, with more businesses coming under OJK supervision. Secondly, it may lead to consolidation as smaller players might struggle to meet the new capital requirements. Overall, the regulation aims to enhance the integrity and stability of the pawnbroking sector in Indonesia.