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Guideline of Creating a Business Plan for Fintech Lending Industry by OJK

The OJK through SEOJK 21/2020 mentioned specific aspects on creating a business plan for fintech lending company, including an evaluation of business plan in the previous period that has been established on 6 November 2020 and comes into force on the same date.”

OJK has introduced OJK Circular No. 21/SEOJK.05/2020 on Business Plan for Technology-Based Fund-Lending Services (“SEOJK 21/2020”), as the implementation of the regulation of OJK Regulation No. 24/POJK.05/2019 on Business Plan of Non-Bank Financial Service Institution (“POJK 24/2019”). SEOJK 21/2020 addressed the business plan’s guideline for Technology-Based Fund-Lending Services (“fintech lending”) operator. Nevertheless, the business plan also requires by fintech lending company during the application to obtain a fintech lending business license.

As for business license application requirement, the business plan consist of the analysis of financial, operational strategy, and business environment (product, business opportunity). Whereas, the business plan based on SEOJK 21/2020 specified several aspects, including evaluation of business plan in the previous period.


Fintech Lending: Definition

Fintech lending, categorized as non-bank financial service institution, is financial service that meets lender and borrower in the event of conducting the loan agreement through electronic internet system. Fintech lending acts as an intermediary party and prohibited to provide funds or become a borrower.  The funds provided by a lender are collected in an escrow account for maximum 48 (forty-eight hours) and must be allocated to the borrower’s virtual account. 

As per 5 November 2020, there are 36 (thirty-six) fintech lending that already obtains the business license and 118 (one hundred-eighteen) fintech lending that registered to OJK. Fintech lending also can be divided into two types, which are conducting the conventional or sharia principle.    

Business Plan for Fintech Lending Business License Application

In accordance with OJK Regulation No. 77/POJK.01/2016 on Lending Service with Information Technology Basis (“POJK 77/2016”), there are 2 (two) steps that require to become the fintech lending operator, namely registration and business license application. The fintech lending operator who already registered to OJK must apply for the business license within 1 (one) year since the stipulated date of registration.

Moreover, the business license application has obliged the fintech lending to enclose the business plan for the first year. Specifically, the format of the business plan has attached on the business license application checklist which issued by OJK on January 2019. The business plan must be included in the company profile and consist of the following matters:

  1. Business Environment Analysis, which explain the analysis of product, market, competitor, and business opportunities.
  2. Strategy and Operational Plan, which divided into 1 (one) year and 5 (five) year plan. This part must explain the development of products and strategy of every aspects (company, marketing, operational, human resources, financial, and management risk).
  3. Financial Analysis, which explain the financial projection and financial feasibility.

Business Plan for Fintech Lending Operator

POJK 24/2019 has stipulated the obligation for a non-bank financial service institution to report the business plan to OJK. The business plan has purposed as supervision’s reference by OJK and direct operational activities concurrently with the development of non-bank financial service institution.  The business plan must be reported at last 30 November every year before the beginning of business plan year. OJK also have authorization for requesting the presentation or adjustment of the business plan.

In according to SEOJK 21/2020, the business plan for fintech lending operator must consist of the following aspects:

  1. Executive summary

Explain the strategic plan and movement for 1(one) year, 3 (three) years, and 5 (five) years

  • Evaluation upon the implementation of the business plan in the previous period

Explain the main business realization, problems, and problems’ solution in the previous period.

  • Vision, mission, and business strategy

Business strategy explain the business competition, policy direction, and business development strategy

  • Management policy and strategy

Explain the distribution plan of loan, business activity development, capital, office/outlets, organization, and system technology.

  • Financial report projection and used assumption

Explain the financial report projection based on macro and micro assumption and financial condition.

  • Ratio and specific post projection
  • Other information

Explain the plan of merger, consolidation, separation and/or business activities termination plan.

The business plan must be reported to OJK through online (OJK communication network system) or offline (directly to OJK’s office).  

Author: Kristalia Andiani Puteri

Gaffar & Co., Indonesian Boutique Law Firm which specializing and focus on commercial law areas include Fintech.

For further queries and information, please contact us:

+62- 21 2271 8638  | +62 – 811 877 216 |  info@gaffarcolaw.com | www.gaffarcolaw.com

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