The Financial Services Authority (OJK) has introduced stricter eligibility and borrowing limits for buy now, pay later (BNPL) services.
The regulator is limiting borrowers’ BNPL exposure across multiple financing companies and setting repayment capacity thresholds as non-performing loans in the sector continue to rise.
The new regulatory circular, as reported by Finansial Bisnis, took effect on 1 July 2026. It mandates that borrowers must be at least 18 years old or married.
Applicants must also prove a minimum average gross income of Rp 3 million per month. Lenders must verify this using payslips or bank statements through an approved income prediction method.
Financing companies must assess borrowers’ BNPL exposure and may limit lending to users with financing from more than three companies simultaneously, based on the latest credit data.
The OJK has also capped repayment capacity to prevent over-indebtedness.
A borrower’s total BNPL debt payments cannot exceed 40% of their monthly income for 2027 and 2028. This threshold will drop to 30% from 2029 onwards.
These restrictions follow a steady rise in bad debt across the industry. Non-Performing Financing (NPF) in the paylater sector reached 3.44 per cent in May 2026, climbing from 2.99 per cent in April.
OJK Chief Executive of Financing Institutions Supervision Agusman attributed this increase to a decline in borrowers’ repayment capacity.
“The OJK continues to encourage the strengthening of credit scoring, the monitoring of financing quality, and collection efforts so that NPF remains under control,”
Agusman said.
He added that the new rules rely on adequate credit scoring and prudent principles to promote healthier and more sustainable financing growth.
The circular serves as a derivative regulation of earlier BNPL frameworks, including POJK No. 32/2025 on BNPL.
It establishes concrete guardrails for credit risk management in Indonesia’s BNPL financing market.
Featured image credit: Edited by Fintech News Indonesia, based on image by mohammadhridoy_11 via Magnific
