Indonesia’s financial services authority OJK has officially revoked the business licence of PT Tani Fund Madani Indonesia, the agritech peer-to-peer fintech lending platform known as TaniFund, per the decree of the OJK Board of Commissioners dated 3 May 2024.
The revocation comes after TaniFund failed to meet the minimum equity requirements and implement OJK’s recommended supervisory measures.
Despite OJK’s efforts, including various supervisory steps and administrative sanctions leading up to business activity restrictions, TaniFund’s management and shareholders were unable to address the underlying issues within the specified timeframe.
The move follows numerous issues and complaints from lenders over the past two years. OJK has also handed over criminal cases related to TaniFund to law enforcement officials for further investigation and action, in line with relevant statutory provisions.
With the termination of its business licence, TaniFund is required to cease all business operations immediately. Moreover, shareholders, management, and employees are prohibited from transferring, pledging, or utilising assets in a manner that diminishes TaniFund’s asset value.
To ensure legal clarity and protect users and stakeholders, TaniFund must undergo liquidation and establish an Information Center and Public/User Complaints Service.
Launched in 2017, TaniFund was set up to connect farmers with lenders to give them access to financial services as many of them are unbanked or underbanked, and do not have a credit history. This initiative aimed to facilitate access to financing for their agricultural businesses. However, financing in the agricultural sector is inherently risky due to unpredictable crop yields and volatile market demands.
The fintech lender, which is affiliated with agritech startup TaniHub Group, has been making headlines for the past two years for many wrong reasons.
In July 2022, DealStreetAsia reported on problems ranging from ongoing cash flow challenges and declining loan quality at TaniFund to potential fraud incidents indirectly linked to the company. Last year, TaniFund also faced lawsuits related to non-payment and allegations of fraud.
As of January 2023, TaniFund’s TKB90 rate stood at 36.07%, which means that the platform’s non-performing ratio stood at 63.93%. This makes TaniFund the worst-performing P2P lender among those registered with the OJK.
Meanwhile, in December 2022, creditors of TaniHub filed a motion with the Jakarta district court seeking to place the troubled company under the ‘temporary suspension of debt payments’ (PKPU) obligations.
