(Bloomberg) -- President Joko Widodo ordered a moratorium on license issuance for fintech lending as the country seeks to eradicate the rampant illegal businesses that have trapped many people and small firms with high-interest loans.
The government will also work with the police to take firm action against current illegal online lending practices, Communications Minister Johnny G. Plate said in a statement after a meeting with the president late Friday.
Jokowi, as the president is known, asked regulators to improve the governance of the fintech lending business, which has extended 260 trillion rupiah ($18.5 billion) of loans to more than 68 million people. Tightened regulations are also needed to limit risks for the fast-growing sector.
There are 107 fintech lending companies registered with the Financial Services Authority to date. So far this year, authorities have shut down more than 1,800 unlicensed fintech lenders that exist online and as social media applications. A total of 4,875 illegal loan accounts have been blocked by the government since 2018.
©2021 Bloomberg L.P.