Ministry blocks 151 unlicensed fintech P2P lenders

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A lot of illegal activity duplicates the websites of licensed companies so it is (seemingly) as if the website is officially owned by the illegal entity.

Jakarta (ANTARA) – The Ministry of Communications and Informatics has blocked 151 unlicensed peer-to-peer (P2P) digital finance (fintech) lending companies and four other companies.

The unlicensed companies were discovered by the Investment Awareness Task Force of the Financial Services Authority (OJK).

The ministry’s director-general of computer applications, Semuel Abrijani Pangerapan, said the government had made several efforts to eradicate illegal fintech (financial technology) loans.

“From the blockade to law enforcement efforts,” Pangerapan said in a press release published here Tuesday.

From 2018 to August 2021, the Investment Awareness Task Force blocked 3,515 illegal fintech lenders, he said.

In his opinion, the most effective key to eliminating illicit fintech loans is improving financial literacy in the community.

“The main key to eradicating illegal fintech loans is educating the public so that the illegal fintech player market will go away on its own,” he said.

Fintech P2P lending applications are attracting the public because they provide easy access to online credit, he noted.

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However, he argued that there are negative effects such as threats and intimidation when people borrow from illegal P2P lenders if they fail to pay their contributions.

Tongam L. Tobing, head of the Investment Awareness Task Force, took note of the flourishing illegal fintech P2P lending and said the trend is very worrying even amid the COVID-19 pandemic, when there are still lenders who go without permission Offer credit.

“There are currently illegal fintech loan offerings taking advantage of some people’s financial difficulties to meet their daily needs,” he added.

According to him, there are several ways unlicensed fintech companies ensnare people.

“Your target are people who need money to cover basic needs in this pandemic. They charge high interest rates with short loan periods,” he said.

These illegal fintech providers offer simple borrowing terms but always ask for permission to access any application user contact information, he added.

“It’s very dangerous because the data can be disseminated and misused to intimidate people into billing,” he warned.

Tobing praised the efforts of the Ministry of Communications and Information Technology to eliminate illegal P2P loans from fintechs by blocking access.

Unlicensed activities are very worrying and detrimental to the community as they take advantage of people’s lack of understanding of financial literacy and deceive them into offering ridiculous high returns, Tobing said.

“A lot of illegal activity duplicates the websites of licensed companies so that it (seemingly) appears that the website is officially owned by the illegal entity,” he said.

“Investment offers through Telegram are illegal, so it is hoped that the public will be vigilant about such offers,” he recalled.

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