OJK Introduces New Regulations for Buy Now Pay Later (BNPL) Services in Indonesia,Kredivo Welcomes Changes
Indonesia’s Financial Services Authority (OJK) has introduced new regulations for the Buy Now Pay Later (BNPL) sector,setting age and income limits for users. The move aims to strengthen consumer protection and foster healthier growth in the rapidly expanding industry. Leading BNPL provider Kredivo has welcomed the changes,emphasizing their alignment with the company’s existing policies and long-term goals.
The new provisions stipulate that BNPL financing will only be available to customers who are at least 18 years old or married,with a minimum monthly income of IDR 3 million. These requirements will apply to new customers and financing extensions by finance companies, with full compliance mandated by January 1, 2027.
Kredivo’s Positive Response
Kredivo, one of Indonesia’s prominent BNPL service providers, has expressed strong support for the OJK’s regulatory framework. Indina Andamari,SVP of Marketing and Communications at Kredivo,stated,“Kredivo is optimistic that this regulatory step will support healthier and more conducive industrial growth,considering that currently the trend of paylater use in Indonesia continues to increase.”
The company has long enforced a minimum age requirement of 18 years and a minimum income threshold of IDR 3 million for account registration. Indina added,“With proper regulations,paylater services are hoped to provide optimal and appropriate impacts for users and encourage economic growth.”
Growth and Expansion
Kredivo has reported double-digit financing growth throughout 2024, driven by strategic initiatives such as expanding offline merchant integration, innovating products and features, and increasing its active user base, which now exceeds 10 million. This growth underscores the increasing adoption of BNPL services in Indonesia, a trend that shows no signs of slowing down.
OJK’s Focus on Consumer Protection
Agusman, Chief Executive for Supervision of Financing Institutions at OJK, highlighted that the new regulations are designed to protect consumers and prevent debt traps, particularly for individuals with limited financial literacy. “Strengthening consumer and community protection was one of the OJK’s considerations in issuing this regulation,” he said during a press conference.
the OJK also aims to develop and strengthen the financing industry, as the BNPL business line has become a focal point for many finance companies. As of November 2024, BNPL financing receivables by finance companies stood at IDR 8.59 trillion, marking a 61.90% year-on-year increase. the gross non-Performing Financing (NPF) rate for BNPL was recorded at 2.92%, reflecting the sector’s robust performance.
Key Highlights of the New BNPL Regulations
| Aspect | Details |
|————————–|—————————————————————————–|
| Minimum Age | 18 years or married |
| Minimum Income | IDR 3 million per month |
| Compliance Deadline | January 1, 2027 |
| BNPL Receivables (Nov 2024) | IDR 8.59 trillion (61.90% YoY growth) |
| Gross NPF Rate | 2.92% |
Looking Ahead
The OJK’s new regulations are expected to create a more lasting and secure BNPL ecosystem in Indonesia. By addressing potential risks such as debt traps and ensuring that users meet minimum financial criteria,the framework aims to balance growth with consumer protection.
For Kredivo, the changes reinforce its commitment to responsible lending practices and align with its vision for long-term industry growth. As the BNPL sector continues to evolve, these regulations could serve as a model for other markets grappling with similar challenges.
For more insights into Indonesia’s financial landscape, explore related articles on OJK’s regulatory updates and the role of BNPL in consumer financing.
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OJK’s New BNPL Regulations: A Conversation with Financial Expert Dr. Rina Wijaya
Table of Contents
Indonesia’s Financial Services Authority (OJK) recently introduced new regulations for the Buy Now Pay Later (BNPL) sector, setting age and income limits for users. These changes aim to strengthen consumer protection while fostering enduring growth in the rapidly expanding industry. to better understand the implications of these regulations, we sat down with Dr. Rina Wijaya, a leading financial expert and professor of economics at the University of Indonesia, to discuss the impact on consumers, businesses, and the broader economy.
Understanding the new BNPL Regulations
Senior Editor: Dr.Wijaya, thank you for joining us today. To start, could you explain the key aspects of the new BNPL regulations introduced by the OJK?
Dr. Rina Wijaya: Certainly. The OJK’s new regulations focus on two main areas: consumer eligibility and industry oversight. First, they’ve set a minimum age requirement of 18 years or marriage for BNPL users, along with a minimum monthly income of IDR 3 million. These criteria aim to ensure that users have the financial capacity to manage repayments responsibly. Second, the regulations mandate full compliance by January 1, 2027, giving companies time to adjust their systems and processes. Additionally, the OJK is closely monitoring BNPL receivables, which stood at IDR 8.59 trillion as of November 2024, reflecting a 61.90% year-on-year growth.
impact on Consumer Protection
Senior Editor: How do these regulations address concerns about consumer protection, particularly for individuals with limited financial literacy?
Dr. Rina Wijaya: The OJK’s focus on consumer protection is commendable.By setting income and age thresholds, the regulations aim to prevent debt traps, especially among vulnerable groups. For example, younger individuals or those with lower incomes may lack the financial literacy to fully understand the risks of BNPL services. These rules ensure that only those with a stable income and a certain level of financial maturity can access these services. This is a significant step toward creating a safer financial ecosystem.
Growth and Challenges in the BNPL Sector
senior Editor: The BNPL sector has seen remarkable growth, with Kredivo reporting double-digit financing growth in 2024.What challenges do you foresee as the industry continues to expand?
Dr. Rina Wijaya: While the growth is impressive,it’s not without challenges. One major concern is the potential for over-indebtedness among users, especially as BNPL services become more accessible. The OJK’s regulations help mitigate this risk, but companies must also play their part by implementing robust credit assessment processes. Another challenge is maintaining a low non-performing financing (NPF) rate, which currently stands at 2.92%. As the sector grows, maintaining this balance between growth and risk management will be crucial.
Kredivo’s Role in the Evolving Landscape
Senior Editor: Kredivo has welcomed these changes, citing alignment with their existing policies. How do you see Kredivo’s role in shaping the future of BNPL in Indonesia?
Dr.Rina Wijaya: kredivo has been a pioneer in the BNPL space, and their proactive approach to compliance sets a strong example for the industry. By already enforcing age and income requirements, they’ve demonstrated a commitment to responsible lending. Their strategic initiatives, such as expanding offline merchant integration and innovating product features, have also contributed to their impressive growth. As the sector evolves, Kredivo’s practices could serve as a benchmark for other players.
looking Ahead: The Future of BNPL in Indonesia
senior Editor: what do you think the future holds for BNPL services in Indonesia, especially with these new regulations in place?
Dr.Rina Wijaya: The future looks promising, but it will require a collaborative effort between regulators, companies, and consumers. The OJK’s regulations provide a solid foundation for sustainable growth, but ongoing education and awareness campaigns will be essential to ensure consumers understand their financial obligations.If implemented effectively,these regulations could position Indonesia as a model for other markets grappling with similar challenges. Ultimately, the goal is to create a BNPL ecosystem that balances growth with consumer protection, fostering long-term economic benefits.
Stay Informed: For more insights into Indonesia’s financial landscape, explore related articles on OJK’s regulatory updates and the role of BNPL in consumer financing.
