Ep-121: New P2P Rules Signal Indonesia’s Push for Fintech Maturity

Peer-to-peer (P2P) lending will soon become safer, cheaper, and easier for Indonesians.

The Indonesian government has been making a slew of changes since last year in its fintech regulations to revive the struggling P2P industry.

Under new rules, Indonesia's Financial Services Authority (OJK) has recently lowered the interest rate ceiling for P2P companies. This means that lending operators wouldn’t increase the rate of interest beyond a certain limit. OJK has not made any changes in the minimum paid-up capital that a P2P company must have at the time of establishment.

The regulation deems P2P providers to have a financial soundness composite of at least "3." The financial soundness is determined by the company's capitalization, quality of funding, management, profitability, and liquidity.

The new regulatory framework is expected to strengthen Indonesia's P2P lending market by making it more accessible and setting the stage for sustained industry growth in the years ahead.

As of October 2021, OJK had identified more than 100 illegal digital P2P lenders. These changes are necessary to weed out players like Investree, the Indonesian P2P startup that was under the scanner of authorities due to fraud allegations and had to eventually shutter operations. Similarly, OJK revoked the license of major P2P lender TaniFund in May 2024 due to a liquidity crisis at the company.

These developments led OJK to make regulatory changes late last year.

OJK changed the capital and ownership requirements of P2P companies, strengthened risk management, and set clearer mandates for lenders, borrowers, and platform operators. It has also issued a letter revising the maximum limits of daily economic benefit for both productive and consumptive loans.

Not only that, it broadened the ambit of companies that could provide P2P lending. It relaxed operational restrictions and made space for innovation and collaboration opportunities.

The digital lending scene in Indonesia is hitting impressive milestones, with P2P lending showing a solid 35.62% year-over-year growth. As mobile apps make borrowing more accessible than ever, the sector is on track for sustained growth, with analysts projecting a 29% CAGR through 2031.

The numbers tell an interesting story: from just 30 licensed P2P lenders in 2017, the industry has expanded to 98 platforms in 2024. This remarkable growth isn't just about statistics — it's about financial inclusion making real progress.

What's particularly noteworthy is how fintech companies are filling crucial market gaps. For Indonesia's unbanked population, these digital lending platforms have become an essential financial tool, offering capital access where traditional banking services have fallen short.

Given these trends, Indonesia's overall fintech market is expected to reach US$20.93 billion by 2025 and continue growing at a CAGR of 9.31% to reach US$32.67 billion by 2030.

This transformation in lending practices is reshaping Indonesia's financial landscape, making credit more accessible while maintaining professional standards.

On that note, let’s dive into this week’s recap.

Buzzing Deals

? Singapore-based online travel booking service Klook has raised US$100 million in a fresh financing round led by European investment firm Vitruvian Partners. With this funding, it has raised over US$1 billion to date. The company will utilize the funding to enhance customer experience, merchant operations, and internal productivity via its expanded artificial intelligence partnership with Google Cloud. Founded in 2014, Klook is a one-stop solution for travelers around the world to book local experiences, attractions, and travel services across Asia Pacific.

? Indonesian greentech startup Noovoleum has raised US$3 million in a fresh round of funding led by Rigel Capital. The company recycles used cooking oil after obtaining it from households and small restaurants on a profit-sharing basis. Noovoleum will use the capital to install 1,000 new oil collection centers in Indonesia as well as to enter three Asian markets by the end of 2025.

? Malaysian fintech company Payd has raised US$400,000 in a seed extension round from A2D Ventures, Orbit Startups, and AngelSpark. Post the capital infusion, the company will onboard new hospitality clients, including one of the world’s well-known hotel chains. It also has plans to extend its reach into the insurance sector. Payd partners with companies in Malaysia and Thailand to enable their employees to receive advance on their salaries.

? Indonesian re-commerce startup Liquid8 has secured an undisclosed amount of funding in a pre-seed round of funding from SPIL Ventures. This is Liquid8’s first venture capital funding since its inception in 2023. The company said it will utilize the capital to improve its e-commerce solution. Liquid8 works with e-commerce and logistics companies to manage their failed deliveries and returned items from customers.

? Malaysia-headquartered cybersecurity platform ArmourZero Holdings has received a strategic investment from Gobi Partners via Gobi Dana Impak Ventures (GDIV). While the investment was not disclosed, the capital will help ArmourZero expand across Southeast Asia and introduce innovative products to simplify cybersecurity for businesses. Started in 2022, ArmourZero tackles high cyber threat incidents and manages the response to active threats. It is present in Malaysia, Singapore, and Indonesia.

What Stood Out This Week

? Singapore Exchange LTD. (SGX) has posted a profit of approximately US$236 million in the six months ended December 31, 2024. This was its highest-ever half-year profit since the Singaporean bourse operator went public. SGX earned US$9.47 million in listing revenues, compared to approx US$10.8 million a year earlier. SGX, which has been struggling to get high-growth companies to list, remains optimistic and sees a healthy pipeline of IPOs this year.

? Baidu is working on a new AI model, Ernie 5.0, which will reportedly be released in the second half of 2025. The all-new AI model will be armed with multimodal capabilities enabling it to process and convert between different formats including text, video, images, and audio. Baidu CEO, Robin Li said that despite DeepSeek creating an advanced AI model at a modest budget, AI companies will still have to make huge investments to set up data centers and cloud infrastructure.

? Indonesia-based VC firm East Ventures and Seoul-based, publicly-listed venture capital firm SV Investment, announced the first close of their US$100 million Southeast Asia fund. This joint fund which was launched in October 2023 is expected to close by mid-2025. The fund will back revenue-generating tech startups from Southeast Asia and Korea that are looking to raise Series A and B funding. The fund will write cheques of US$1 to 3 million as the lead investor on high-conviction opportunities driven by exceptional founders.

? The Monetary Authority of Singapore (MAS) and the Association of Banks in Singapore (ABS) will set up a new entity to consolidate different payment schemes for better administration and governance. Currently, Singapore has multiple payment schemes like FAST, PayNow, and Singapore Quick Response Code. The new entity will be governed by senior representatives from MAS and the financial services industry. The two bodies will also work together to create a national payments strategy and ensure a safe, efficient, and innovative payment infrastructure.

? The Climate and Sustainability Fund launched by Indonesia’s AC Ventures has received U$8 million from Australian Development Investments (ADI), Australia’s flagship impact investment fund. AC Ventures would back greentech companies in sectors including renewable energy, electric mobility, energy efficiency, waste management and circular economy, and climate-smart agriculture. Australian Embassy Indonesia said the main aim behind these investments would be to achieve a reduction of 10 megatons of carbon dioxide emissions.

And that’s the wrap for this edition of #ICYMI, our weekly curated highlights from the Asian tech ecosystem. Subscribe to receive it every Thursday and stay updated on the noteworthy tech developments you might have missed during the week. Like this newsletter? Share it with your friends and colleagues here.