97 licensed online lenders are accused of coordinating to set high daily interest rates through the Indonesian Joint Funding Fintech Association.
The Indonesian Competition Commission, or KPPU, today opened hearings in a case against 97 licensed online lenders accused of coordinating to set high daily interest rates between October 2018 and March 2024.
Arnold Sihombing, the head of the KPPU’s investigative panel, told the packed hearing room in Jakarta that investigators had found indications of a “cartel arrangement” among members of the Indonesian Joint Funding Fintech Association, or AFPI, to impose excessive interest rates.
He said AFPI members had agreed to a daily interest-rate ceiling of 0.8 percent — far above the 0.3 percent benchmark introduced by the Financial Services Authority, or OJK, in 2024.
“This shows that members of the AFPI set interest rates that appeared excessive,”
Sihombing said while reading the allegations before a panel of KPPU commissioners.
He cited Article 5 of Indonesia’s 1999 competition law, which prohibits competitors from agreeing on prices for goods or services in the same market. Investigators concluded there was “adequate evidence” that the companies had breached this provision, he said.
AFPI spokesperson Kuseryansyah rejected the cartel allegation in a press conference following the hearing, telling reporters the association merely set a maximum daily rate of 0.8 percent and left individual lenders free to set lower rates. He said the ceiling was introduced in response to public complaints about illegal lenders, at a time when the industry was in its infancy and specific OJK regulations had yet to be issued.
“In 2018-2019, online lending was still in an early stage. The spirit of setting interest rates at that time was to protect consumers from illegal online lenders and predatory practices, in line with the OJK’s direction,”
he said. He noted that AFPI lowered the ceiling to 0.4 percent in 2021 following further guidance from the regulator.
The OJK has previously confirmed that the ceiling — referred to as a cap on “maximum economic benefit” — was introduced at its direction as a consumer-protection measure and to distinguish licensed fintech lenders from illegal operators. Under OJK regulations, AFPI is tasked with enforcing market discipline, supporting provider rehabilitation and handling consumer complaints, including ensuring members comply with interest-rate limits.
Kuseryansyah insisted there was no conspiracy to fix rates.
“Our intention was to provide access to alternative financing to the public while ensuring that industry players implement sound risk management, comply with regulations and abide by the law,”
he said.
Almost all of the 97 lenders were represented at Thursday’s hearing, with only a few absent. The KPPU scheduled the next session for Aug. 26 to hear from those who did not attend.
Source: MLex
