Jakarta. A financial technology (fintech) association is bracing itself for the upcoming policy aimed at raising the online loan cap while hoping they can access government data such as the borrower’s utility bills to make sure they can pay their debt. 

The Financial Services Authority (OJK) not long ago announced they would allow borrowers on online peer-to-peer (P2P) lending platforms to apply for loans of up to Rp 10 billion ($616,213). This marks a fivefold increase from the current cap of Rp 2 billion. 

According to the Indonesian Sharia Fintech Association (Asfi), there are some things that both the platforms and the government need to pay attention to prevent any payment failures. 

Asfi’s chairman Ronald Yusuf Wijaya said OJK should disclose the data from state agencies, including the state utility firm PLN and the government’s security agency BPJS. This way, P2P lending platforms can conduct a better, more thorough screening of the loan applicants. 

“I think associations and the authorities need to make sure that new regulations can be more supportive of the operators to prevent people from being unable to pay their debt, which is increasingly more common now,” Ronald said in Jakarta on Tuesday.

Ronald said that P2P lending fintech needs to find more accurate data on the borrowers and make better analyses. Fintech platforms should also limit the use of loan applications. Some people borrow money from other online lenders to pay off the debts that they have on other platforms. This puts the borrowers in a vicious cycle. According to Ronald, some people even use 10 online lender apps to pay their loans.

“That’s why we have agreed on a new rule. People can only borrow at no more than 6 platforms. As for productive debt, they can only get them from 3 platforms at max,” Ronald said.