Customers who borrow funds through illegal financial technology lenders do not need to repay their loans, Deputy Communications Minister Samuel Abrijani Pengerapan said on Tuesday. (Antara Photo/Rivan Awal Lingga)
No Need for Customers of Illegal Lenders to Repay Loans: Official
BY : FANNY POTKIN
NOVEMBER 27, 2018
Jakarta. Customers who borrow funds through illegal financial technology lenders do not need to repay their loans, Deputy Communications Minister Samuel Abrijani Pengerapan said on Tuesday.
The government is battling a wave of unlicensed fintech lenders who avoid registering with the authorities and often employ aggressive debt collection practices.
"The borrower can borrow as much as they like because the lender is not official. It's hard to reverse it," Samuel told reporters. "If the companies try to collect their debt, report them, the authorities will arrest them because they are not licensed."
He encouraged consumers to first check whether the company they were dealing with was among the 73 fintech companies licensed by the Financial Services Authority (OJK).
Regulators have banned more than 400 fintech lenders for operating without a license, with the communications ministry then blocking their websites in Indonesia.
An investigation by Reuters in September found that many of Indonesia's banned lenders had come from China following a crackdown on the loosely regulated micro-credit sector there.
Four customers who failed to repay loans on time told Reuters that Chinese fintech lenders took control of their phone contacts – permission is granted when the app is installed – and harassed colleagues and friends for repayment.