Indonesia’s Financial Services Authority (OJK) has enforced a new minimum capital requirement of IDR 12.5 billion for the country’s peer-to-peer (P2P) lending sector, effective by the end of June 2025.

The regulation has already led 12 online lending firms to bow out.

These lenders, which failed to meet the threshold, are now actively being sought after by prospective investors due to a moratorium on new P2P licenses.

According to Finansial Bisnis, Agusman, Chief Executive Supervisor of Financing Institutions, Venture Capital Companies, Microfinance Institutions, and Other Financial Services Institutions (PVML) at OJK, said that as of July 2025, 12 licensed P2P lenders had yet to comply with the capital mandate.

“Of the 12 companies, two plan to merge, and 10 have submitted action plans. Most intend to seek new investors,”

he said.

There are currently 96 registered P2P lenders operating in Indonesia. Agusman noted that the new regulation has triggered acquisition interest from investors.

“Some investors have already begun due diligence. We’ll wait to see the results,”

he said.

Data from OJK shows that total P2P lending assets as of May 2025 stood at IDR 9.67 trillion, marking a 32.17% increase year-on-year.

The rise in assets was fuelled by a 27.93% growth in loan disbursement, reaching IDR 82.59 trillion.

Foreign investment in the sector also grew, with funds from international investors increasing from IDR 11.43 trillion in May 2024 to IDR 13.09 trillion in May 2025.

Meanwhile, the sector’s at-risk loan ratio (TWP90) declined to 3.19%, driven by improved credit scoring and enhanced loan collection processes.

“This includes better credit scoring for borrowers and more effective collection efforts,”

said Agusman, adding that he remained optimistic about the sector’s prospects.

“The industry will continue to grow, backed by regulatory improvements and enhanced supervision, despite challenges such as credit risk and global economic shifts.”

Nailul Huda, Digital Economy Director at the Center of Economic and Law Studies (Celios), highlighted the difficulty of meeting the capital requirement amid the ongoing tech winter and the sector’s tarnished image due to default scandals.

“OJK is indirectly pushing for mergers or acquisitions. If firms can’t meet the capital rules, their options are to merge with a similar company or be acquired by a digital firm,”

said Huda.

He noted that while consolidation may reduce the number of players in the market, it would ultimately lead to stronger capital bases and more efficient operations.

“However, attracting investors is challenging in today’s high interest rate environment. So, merger is the more rational path, especially with the moratorium still in place,”

he explained.

Agusman reaffirmed that OJK would continue to strengthen Indonesia’s P2P lending landscape.

He said there remains ample room for capital injections to help filter out quality platforms.

“Just like in banking, capital increases will be done gradually,”

he said.

Featured image credit: Edited by Fintech News Indonesia, based on image by Arenicx via Freepik