The surge in online loan cases has prompted many members of the public to urge the Financial Services Authority (Otoritas Jasa Keuangan or OJK) to take decisive action. One such action is the issuance of regulations regarding interest rates for fintech applications. This comes especially after it has been revealed that, until now, there has been no determination regarding the magnitude of interest rates and other associated fees.

Edi Setijawan, the Head of the Department for Supervision of Microfinance Institutions and Other Financial Institutions at OJK, explained that, up to this point, it has been the fintech providers or companies themselves who determine the fees and interest rates to be charged. However, this falls within the framework of the Code of Conduct established by the Indonesian Fintech Association.

Included in these provisions is the total amount of loan interest and the maximum flat interest rate of 0.4% per day, calculated from the principal loan amount. The maximum late payment fee is set at 0.8% per day, with loan tenures extending up to 24 months.

Edi also clarified that fintech companies are obliged to provide insurance and collaborate with relevant parties. Insurance for borrowers and fund providers is optional, and both parties can choose not to utilize it.

Of course, service fees, late payment charges, and interest rates do not include the Value Added Tax (VAT) imposed on borrowers. Nevertheless, even with all these costs considered, the repayment amount will not reach 100% or double the borrowed amount.

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