OJK Revises Capital and Down Payment Requirements for Multifinance

The Financial Services Authority (“ OJK ”) is preparing regulatory relaxation measures, or deregulation, for the multifinance industry. One such measure is OJK Regulation (“ POJK ”) No. 46 of 2024 on the Development and Strengthening of Financing Companies, Infrastructure Financing Companies, and Venture Capital Companies (“ POJK 46/2024 ”).

“Under POJK 46/2024, the Own Capital-Paid-Up Capital ratio (Modal Sendiri-Modal Disetor- “ MSMD ”) or the ratio of own capital to paid-up capital is 150%. Under this deregulation, it will be reduced back to 50% for cash funds and business fund facilities,” said Maman Firmansyah, Director of Supervision for Financing Institutions and Venture Capital Companies at OJK, in an interview with Hukumonline.

According to Maman, the main trigger for OJK to implement deregulation is the slowing growth of the financing industry, which necessitates regulatory relaxation. Previously, OJK also planned to loosen down payment requirements for financing. Multifinance companies that meet certain criteria can offer loans with a 0% down payment, as regulated under OJK Regulation No. 35/POJK.05/2018 on Business Implementation of Financing Companies (“ POJK 35/2018 ”), which governs down payments (DP) for motor vehicle loans.

“Hopefully, we will be able to announce it officially in the near future. Just wait for the update,” he added.