KPPU Decision Deemed Not Aligned with Consumer Expectations on Low Pinjam Interest Rates, Here's the Explanation

Jakarta, VIVA – The Center of Economic and Law Studies (Celios) has responded to the decision by the Business Competition Supervisory Commission (KPPU) to impose a total fine of Rp755 billion on 97 online lending (fintech peer-to-peer lending) companies for proven collusion in setting interest rates.

Celios Digital Economy Director, Nailul Huda, opined in the suspected Pinjam interest rate cartel case that the KPPU should trace the case period to clearly examine the events and conditions at that time.

“Before the AFPI set the maximum Pinjam interest rate cap, Pinjam interest rates were set by each company, tending to be higher. The public complained loudly. If traced back, the association could decide on the maximum interest rate due to a regulatory vacuum,” said Nailul, quoted from his statement in Jakarta, Tuesday, 31 March 2026.

Furthermore, Nailul questioned whether the KPPU has calculated the balance of Pinjam interest rates during the regulatory vacuum. “From various reports, the public complained that Pinjam interest rates were too high and tended to be reckless, especially illegal online loans,” he concluded.

Due to this regulatory vacuum, the Financial Services Authority (OJK) eventually regulated the upper limit of Pinjam interest rates to avoid excessively high rates that burden the public.

This regulation was initially outlined in the Code of Ethics (Behavioural Guidelines) of the Indonesian Joint Funding Fintech Association (AFPI) before being clarified through OJK Circular Letter (SE) No.19/SEOJK.06/2023, and now updated through SEOJK No.19/SEOJK.06/2025.

These provisions, among others, regulate the limits on economic benefits that can be imposed by Pinjam Providers on Fund Recipients, as an effort to ensure healthy, transparent business practices oriented towards consumer protection.

In a separate opportunity, AFPI General Chairman, Entjik S. Djafar, emphasised that there has never been proven joint agreement regarding the setting of maximum economic benefits or interest rates among industry players.

“We are certainly disappointed with this KPPU decision because the current maximum economic benefits limit is a directive from the Financial Services Authority (OJK) to protect consumers from predatory lending practices or illegal online loans that charged very high interest rates at that time,” said Entjik.