Peer-to-Peer (P2P) funding is a form of financial technology and alternative funding that is currently on the rise and believed will continue to grow in the future. Despite its popularity, there is a trending decline of P2P organizers’ success rate based on OJK’s statistics from May 2022 - May 2023, meaning that there is an increase of payment failures or default amongst the users.

1. Legal Brief
Legal Constraints in P2P’s Payment Failure
Legal Brief
Legal Constraints in P2P’s Payment Failure

2. INDONESIA’S P2P FUNDING OVERVIEW
The recognized term for P2P funding in Indonesia is Information
Technology-Based Co-Funding Services, which is the provision of
financial services to bring together funders and fund recipients in
conducting conventional funding or based on sharia principles directly
through an electronic system by using the internet.
Organizer
[Art. 1 (8) OJK Reg. No. 10/2022]
Funder
[Art. 1 (10) OJK Reg. No. 10/2022]
Funding Agreement
[Art. 30 and 32 OJK Reg. No. 10/2022]
Organizer-Funder Agreement
[Art. 30 and 31 OJK Reg. No. 10/2022]
Fund Recipient
[Art. 1 (9) OJK Reg. No. 10/2022]
concerning Technology-Based
Fund-Lending Services
OJK Reg 77/2016 01
concerning Technology-Based
Co-Funding Services
OJK Reg 10/2022
02
Types of Funding
Funding for business that produces goods and/or services,
including business that provides added value and increase income
for Fund Recipients [Art. 25 (1) a OJK Reg. No. 10/2022].
Productive
Funding
Multipurpose
Funding
Funding for goods and/or services required by Fund Recipients for
use/consumption and not for business purposes or productive activities
within the agreed period [Art. 25 (1) b OJK Reg. No. 10/2022].
A H R P L e g a l B r i e f

3. STAKEHOLDERS & AGREEMENTS
IN P2P FUNDING
PT Investree Radhika Jaya PT Mitrausaha Indonesia
Group
PT Amartha Mikro Fintek PT Lunnaria Annua Teknologi
PT Akseleran Keuangan
Inklusif Indonesia
PT Kredit Pintar Indonesia
Examples of P2P Organizers Registered in OJK
an Indonesian legal entity that
provides, manages, and operates P2P
Platform either conventionally or based
on Sharia Principles.
[Art. 1 (8) OJK Reg. No. 10/2022]
individuals, legal entities, and/or
business entities that provide
funding.
[Art. 1 (10) OJK Reg. No. 10/2022]
individuals, legal entities, and/or
business entities that receive
funding.
[Art. 1 (9) OJK Reg. No. 10/2022]
Funder Funding Recipient Organizer
a. agreement number
b. agreement date
c. identity of the party in the form of the
names and identification of the
Funder
d. rights and obligations of the parties
e. funding amount
f. funding economic benefits
g. commission amount
h. contract period
i. details of fee
j. provision on fines (if any)
k. use of personal data
l. mechanism for funding collection
m. risk mitigation in the event of non-
performing funding
n. mechanism for dispute settlements
o. mechanism for the settlement of
rights and obligations in the event
that Organizer fails to continue their
operational activities
a. agreement number
b. agreement date
c. identity of the parties
d. rights and obligations of the parties
e. funding amount
f. funding economic benefits
g. instalment value
h. contract period
i. collateral objects (if any)
j. related fees
k. provision on fines (if any)
l. use of personal data
m. mechanism for dispute settlements
n. mechanism for the settlement of
rights and obligations in accordance
with provisions of laws and
regulations if Organizer fails to
continue their operational activities
Organizer-Funder Agreement Funding Agreement
Agreement between Organizer and Funder shall
be set forth in an electronic document which
must at least contain [Art. 31 (2) OJK Reg. No.:
10/2022]:
Funding agreement between Funder and Fund
Recipient shall be set forth in an electronic
document which must at least contain [Art. 32
(2) OJK Reg. No. 10/2022]:
A H R P L e g a l B r i e f

4. KEY PROVISIONS CONCERNING
ORGANIZERS
A H R P L e g a l B r i e f
Organizer
must fulfil the
maximum
funding limit
provision:
1
2
to every Fund Receiver
by every Funder and
its afiliates
IDR 2 billion
[Art. 26 (3) OJK Reg. No. 10/2022].
25% of the final position of funding
at the end of month
50% of the final position of funding
at the end of month
80% of the final position of funding
at the end of month
75% of the final position of funding
at the end of month
Funder Not
Surpervised by OJK
Funder Surpervised
by OJK
18
months
12
months
6
months
after
4 July 2022.
by no
later than
Capital and Equity Shareholders Notable Restrictions
Min. Paid-Up Capital
IDR 25 million
[Art. 4 (1) OJK Reg. No. 10/2022].
Min. Equity
IDR 12.5 billion, which is fulfilled
in 3 phases [Art. 50 OJK Reg. No.
10/2022]:
1) IDR 2.5 billion applicable 1
year after 4 July 2022.
2) IDR 7.5 billion applicable 2
years after 4 July 2022.
3) 12.5 billion applicable 3 years
after 4 July 2022.
Shares of Organizers may be owned by [Art. 3
OJK Reg. No. 10/2022]:
1) Indonesian individuals and/or legal entities;
or
2) Indonesian individuals and/or legal entities
with foreign individuals and/or legal entities.
Foreign share ownership is max. 85% (does not
apply to public companies in IDX)
[Art. 3 (4) OJK Reg. No. 10/2022].
Organizer must determine at least 1 (one)
Controlling Shareholder [Art. 5 (1) OJK Reg. No.
10/2022].
Change of shareholders must obtain OJK
approval (except for change of shareholders of
public companies in IDX) [Art. 68 (1) OJK Reg.
No. 10/2022].
Sources of funds for equity participation
in an Organizer is prohibited from
loans and funds arising from financial
crimes [Art. 4 (3) a OJK Reg. No. 10/2022].
Prohibited to act as Funder or Fund
Recipient [Art. 111 (b) OJK Reg. No.
10/2022].
Prohibited to act on behalf of Funder to
carry out funding and/or provide
automatic funding feature [Art. 111 (c)
OJK Reg. No. 10/2022].
Prohibited to provide securities in any
form for the fulfilment of other parties
[Art. 111 (f) OJK Reg. No. 10/2022].
Prohibited to issue letter of indebtness
[Art. 111 (g) OJK Reg. No. 10/2022].
[Art. 26 (5) OJK Reg No. 10/2022]
[Art. 26 (6) and (7) OJK Reg No. 10/2022]

5. PAYMENT FAILURE
A H R P L e g a l B r i e f
96.64 3.36
TKB90 TWP90
TKB90 is the measurement of the
Organizer’s success rate in facilitating the
settlement of funding obligations within a
period up to 90 days from the due date.
TWP90 is the measurement of default or
negligence in the settlement of obligations
stated in the funding agreement above 90
days from the due date.
96,00%
96,20%
96,40%
96,60%
96,80%
97,00%
97,20%
97,40%
97,60%
97,80%
M
A
Y
-
2
2
J
U
N
-
2
2
J
U
L
-
2
2
A
U
G
-
2
2
S
E
P
-
2
2
O
C
T
-
2
2
N
O
V
-
2
2
D
E
C
-
2
2
J
A
N
-
2
3
F
E
B
-
2
3
M
A
R
-
2
3
A
P
R
-
2
3
M
A
Y
-
2
3
0,00%
0,50%
1,00%
1,50%
2,00%
2,50%
3,00%
3,50%
4,00%
M
A
Y
-
2
2
J
U
N
-
2
2
J
U
L
-
2
2
A
U
G
-
2
2
S
E
P
-
2
2
O
C
T
-
2
2
N
O
V
-
2
2
D
E
C
-
2
2
J
A
N
-
2
3
F
E
B
-
2
3
M
A
R
-
2
3
A
P
R
-
2
3
M
A
Y
-
2
3
Performing
Special Mention
Substandard
Doubtful
Non-performing
if there is no delay in payment of the principal and/or
economic benefits of the funding.
if there is a delay in payment of principal and/or
economic benefits of the funding that has exceeded its
maturity date by up to 30 (thirty) calendar days.
if there is a delay in payment of principal and/or
economic benefits of the funding which has exceeded
30 (thirty) calendar days up to 60 (sixty) calendar days.
if there is a delay in payment of principal and/or
economic benefits of the funding which has exceeded
60 (sixty) calendar days up to 90 (ninety) calendar days.
if there is a delay in payment of principal and/or
economic benefits of the funding which has exceeded
90 (ninety) calendar days.
Financial Performance of Fintech Lending Company (Organizers)
(May 2022 - May 2023)
TKB90 TWP90
Based on recent OJK Statistics, the TKB90
and TWP90 per May 2023 are as follows:
Classification of Funding Quality of Organizers
As seen from the statistics issued by OJK, it
is understood that P2P funding schemes are
exposed to payment default, reaching the
status of non-performing funds, which is a
delay in payment for more than 90 (ninety)
calendar days.
Upon observing the data from May 2022 to
May 2023, there is a downward trend for
TKB90 (success rate) and upward trend for
TWP90 (default rate).
[Art. 51 (2) OJK Reg No. 10/2022]

6. RISK MITIGATION
A H R P L e g a l B r i e f
Under Art. 35 (3) and (4) OJK Reg. No.
10/2022, Organizers must facilitate risk
mitigation for Users (Funders & Funding
Recipients), which at least include:
conducting a risk analysis of
funding proposed by Funding
Recipients;
conducting a verification of
Users’ identity and document
authenticity
conducting collection of funding
that is channeled optimally
facilitating the transfer of funding
risk
facilitating the transfer of risk on
a collateral object, if there is a
collateral object
a
b
c
d
e
01
Under Art. 38 (1), (2), (3b) OJK Reg. No.
10/2022, Organizer may cooperate with
financial service institutions and non-financial
institutions, among others, for facilitating the
management of risk mitigation.
02
Organizer shall conduct a scoring on
prospective Fund Recipient. Should the Fund
Recipient be deemed worthy of receiving fund,
they shall be presented as one of the options
in the list of prospective Fund Recipient before
the Funder.
Organizer could independently give efforts to
obtain fulfilment of payment obligation or could
transfer the obligation to a third party.
Through insurance or securities as agreed
between the Funder and the Organizer in a
prior agreement.
Under Art. 26 OJK Reg. No. 10/2022, the
Organizers must implement Maximum
Funding Limit as follows:
03
IDR 2 billion to Funding
Recipient, with a condition that
the Fund Recipient must return
half or full of the received funds
before obtaining more funds in
the P2P scheme.
a
Funders can provide maximum
percentage of the final position of
funding at the end of month,
based on stages (see slide 4).
b
Pursuant to letter (d) and (e) above, it is understood that
securities and insurances are available in the context of P2P
funding. However, it is optional in nature.
To protect the Funder’s interest in this scheme, the Funder may
opt for a credit insurance mechanism as prescribed in OJK Reg.
No. 69/2016 to guarantee the fulfilment of the Funding Recipient’s
financial obligations towards the Funder.
In United Kingdom, the Financial Conduct Authority (FCA)
also implements similar regulations concerning risk
mitigation in P2P funding, such as (i) credit scoring of the
prospective funding recipients as the basis of determining
which of the funding recipient shall receive the fund and
(ii) the existence of maximum funding limit provided by
the funder to the P2P platform for the funding recipient.
Furthermore, the FCA has also implemented contingency
funds in P2P which allows the funders to obtain a return
in the event of fund recipients’ default.

7. DISPUTE SETTLEMENT
INSTITUTIONS
A H R P L e g a l B r i e f
Financial Services
Institution or Pelaku
Usaha Jasa Keuangan
(PUJK)
Alternative Institution for Financial
Services Sector Dispute Resolution
or Lembaga Alternatif Penyelesaian
Sengketa Sektor Jasa Keuangan
(LAPS SJK)
District Court
L A P S
S J K
C O U R T
P U J K
The district court is a first
instance court in Indonesia
which is eligible to examine
and adjudicate cases
including but not limited to
civil disputes based on (i)
breach of contract or (ii) tort
claim [HIR].
LAPS SJK is an institution that settles
disputes in the financial services sector
outside of court [Art. 1 (1) OJK Reg. No.
61/2010].
PUJK is an institution engaged in
the financial services sector, one
of which is the Organizer based on
Art. 1 (3) OJK Reg. No. 61/2020.
PUJK is required to receive and
record every complaint submitted
by consumers (including Funders
and Funding Recipients) and or
consumer representatives [Art. 7
(1) OJK Reg. No. 18/2021].

8. DISPUTE SETTLEMENT
MECHANISMS
A H R P L e g a l B r i e f
Warning Letters Complaint to PUJK
The Organizer is obliged to issue
warning letters to the Funding
Recipient who defaulted in
accordance with the time limitation
as stipulated in the Funding
Agreement. Further, the Organizer
is eligible to cooperate with other
parties to contact the Funding
Recipient [Art. 102 - 103 OJK Reg.
No. 10/2022 Jo. Art. 1238
Indonesian Civil Code].
PUJK is obliged to receive and
register every complaint filed by
either the funder or the funder
recipient and/or his/her/its
representatives [Art. 7 (1) OJK
Reg. No. 18/2018].
Alternative Dispute Resolution
Institution in Financial
Services
Court
In the event the Funding Recipient
still does not fulfil their payment
obligation after receiving warning
letters and complaint to PUJK, the
Funder could follow up the
settlement through court, either by:
LAPS SJK can adjudicate disputes
that have fulfilled the following
criteria [Art. 102 Jo. 103 OJK Reg.
No. 10/2022]:
PUJK can submit responses in the
form of (i) explanation of the
problem, in the event that the
problem which causes a loss and/or
potential loss for the Consumer did
not arise out of PUJK’s error; or (ii)
offer a settlement, in the event that
the loss and/or potential loss of the
Consumer is caused by PUJK’s
error [Art. 25 (1) OJK Reg. No.
18/2018].
In the event that the Consumer
and/or Consumer Representative
rejects the Complaint Response
from the PUJK, then the PUJK is
required to provide information to
Consumers and/or Consumer
Representatives regarding efforts to
resolve the dispute that can be
done through the court or outside
Court [Art. 25 (1) OJK Reg. No.
18/2018].
creating a Notarial Deed on
Debt Acknowledgment which
is deemed the same as a
legally final and binding court
decision and therefore, could
be executed immediately
[Art. 1878 Indonesian Civil
Code]; or
Filing a civil lawsuit based on
breach of contract where the
Funding Recipient does not
fulfil their contractual
payment obligation or based
on tort. However the basis is
subject to further analysis of
the facts [Art. 118 HIR].
01 02
02 03a 03b
efforts have been made to
resolve the complaint by the
PUJK but have been rejected
by the Consumer (including
Funder and Funding
Recepient) or the Consumer
(including Funder and
Funding Recepient) has not
received a response to the
complaint;
the dispute submitted is not
an ongoing dispute that is
currently in process or has
been decided by a court,
arbitration, or other
alternative dispute resolution
institutions; and
civil in nature.

9. KEY TAKE-AWAYS FROM P2P FUNDING
IMPLEMENTATION
01
02
03
04
The P2P funding scheme is different in the sense that the Funder and Funding
Recipient carry out funding through an electronic platform which sets aside the
conventional bank as intermediate. P2P funding in Indonesia is regulated under
OJK Reg 10/2022, which mainly highlights the P2P Organizer’s roles and
responsibilities.
To avoid payment failure, OJK Reg 10/2022 has set forth risk mitigation provisions for Organizers,
which are comparable to the norms applied in international practices. Notwithstanding, payment failure
is viewed as the Funder’s risk, as there is no clearly expressed liability towards the Funding Recipient
in the event of default, considering that securities and insurances are optional. Thus posing as the main
legal constraint in the implementation of P2P funding, as there is lack of recourse for Funder to obtain
returns.
In the event that the Funding Recipient defaults, the Organizer issues a warning letter,
either by itself or in cooperation with other parties. In addition, Funders can also opt to
send a complaint to the Organizer. Futher steps are also available through alternative
dispute resolution via LAPS SJK, as well as civil litigation via the relevant district court.
[
A H R P L e g a l B r i e f
The occurrence of payment failure or default in P2P funding scheme is recorded by OJK through
indicator TWP90, whereby recently amounts to a rate of 3.36% per May 2023. In account of OJK’s
statistics since May 2022 - May 2023, there is an incline of default rate and subsequent decrease in
success rate of P2P funding based on the Organization’s performance.

10. We will continue to follow the developments on this topic and provide additional information as it
becomes available. If you have any questions on this topic, please contact:
Gradita Maharani Purukan
gradita@ahrplaw.com
Tariq Hidayat Pangestu
tariq@ahrplaw.com
Stacia Faustine
stacia@ahrplaw.com
This publication has been prepared by AHRP for educational and informational purposes only. The information contained in this publication is not
intended and should not be construed as legal advice. Due to the rapidly changing nature of law, AHRP makes no warranty or guarantee concerning
the accuracy or completeness of this content. You should consult with an attorney to review the current status of the law and how it applies to your
circumstances before deciding to take any action.
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