OJK draft would class online loans as bad only after more than 180 calendar days past due

Implications for lenders

Lenders that fund pindar platforms can keep monitoring arrears at more than 90 days even if the bad-loan category moves to more than 180 calendar days, since the industry TWP90 already rose to 4.73% in August. Platforms may need to revise collection stages, provisioning and funder reporting once the final rule is issued.

Implications

Facts

Draft rule: in a written answer reported on 8 October, Agusman, OJK's chief executive for the supervision of finance companies, venture capital, microfinance and other non-bank institutions, said a draft amendment to POJK 40/2024 on technology-based joint funding would define bad (macet) funding as payments more than 180 calendar days late. ¹ Under current rules, funding is bad when it is more than 90 days late. ² OJK said the change aims to align pindar collectibility with bank rules, because banks are the majority of institutional funders, and to support more effective management of funding quality and integrated supervision. The reports give no effective date, and they do not say whether the TWP90 indicator itself would be redefined.

Credit quality: the aggregate TWP90 ratio, the share of pindar funding more than ninety days past due, was 4.73% at end-August (up from 4.32% in July). ³ 16 platforms had a TWP90 above OJK's 5% threshold (unchanged from July). ⁴ Outstanding pindar funding was IDR 106.94 trn, up 22.07% year on year. ⁵

Supervisory message: on 9 October OJK urged platforms to strengthen analysis of borrowers' ability to pay, noting that young adults are the largest group of pindar users, and to record the purpose of funding so that productive and consumptive lending can be told apart.

Analysis

Time series: TWP90 eased from 4.62% in April to 4.26% in June ⁶, then rose to 4.73% in August. The number of platforms above the threshold fell from 19 in April ⁷ to 16 by August, so the August rise in arrears is spread across the industry rather than concentrated in more weak platforms.

What changes: a later bad-loan cut-off does not change how many loans are ninety days late, but it changes when a loan moves into the worst quality category. For banks that fund pindar platforms, the stated aim is to put that funding on the same clock as their own loans. For other funders and borrowers, the effect depends on the final text, including whether TWP90 stays the headline arrears measure.

Cross-sector: Indonesian banks' gross NPL ratio was 2.11% in August ⁸, well below pindar TWP90 of 4.73%. Bringing pindar classification closer to bank rules makes the two easier to read side by side, but the gap in arrears levels remains.

Counterpoints and uncertainties

The rule is still a draft and could change; no effective date has been published. A longer cut-off could delay recognition of losses at platforms whose arrears are already rising, which is the opposite of what funders need. If TWP90 is kept as the published measure, the practical change for reported arrears may be small.