Jakarta. The Financial Services Authority or OJK’s plans to raise the online loan limit to Rp 10 billion ($617,549) is expected to be helpful for new businesses, according to economist David E Sumual.

OJK recently announced that they would increase the cap for loans on peer-to-peer (P2P) lending platforms by five times. Currently, borrowers can only apply for productive loans of no more than Rp 2 billion. David sees no issue with the plan, even saying that Indonesia’s micro, small, and medium enterprises (MSMEs) as well as startups are in great need of relatively large loans. According to David, these small, freshly established businesses often struggle to borrow money from banks.

“A business that has only been around for 1-2 years typically has not made any profit. Banks usually require businesses to meet some criteria before they can apply for financing. For instance, the borrowing businesses must have been operating for at least 3 years and have already made a profit,” David said on Tuesday.

An example of businesses that might need lots of cash as soon as possible are those in the construction sector. David added: “Many tenders are worth Rp 10 billion and more. And everything needs to be quick so the tenders can run. That’s why financing invoices often need loans around Rp 10 billion.”

“This is also a chance for Indonesia’s MSMEs to grow in the productive sector,” David said.