Indonesia’s P2P lending association AFPI has rejected the antitrust agency’s allegations that lending platforms engage in anti-competitive behaviour through coordinated interest rate pricing, top executives said during a media briefing in Jakarta on Wednesday.
AFPI executives said the sector-wide interest rate ceiling—agreed by all members at 0.8% per day in 2018—was introduced in coordination with the Financial Services Authority (OJK) and is not the result of price-fixing.
On April 29, 2025, the Indonesian Business Competition Supervisory Commission (KPPU) launched formal proceedings in a case involving 97 Indonesian P2P platforms, alleging cartel behaviour under Article 5 of Law No. 5/1999, which prohibits agreements between businesses to fix prices or limit market competition. The case covers a market estimated to be worth 1,650 trillion rupiah ($106 billion). The commission is now pursuing legal proceedings based on this provision.
“The KPPU’s argument around fixed pricing is inaccurate,” said Ronald Andi Kasim, secretary general of AFPI. “There was never a formal agreement between players to set interest rates. What exists is a code of conduct developed within AFPI at the request of OJK as part of efforts to formalise and clean up the market, especially to combat illegal lending.”
According to Indonesia’s Investment Alert Task Force (SWI), more than 3,600 illegal lending platforms operated between 2018 and 2021, often charging exorbitant interest rates without offering any borrower protections.
AFPI said the 0.8% daily interest cap was introduced in response to a request from OJK in 2018 to clearly distinguish regulated platforms from illegal ones. “Perhaps KPPU is unaware that what was implemented was a maximum interest rate cap, not a fixed price,” said Kasim. “Even then, platforms were free to offer rates below that ceiling based on their risk appetite, business model, and lender-borrower agreements. There was no uniform pricing mandate.”
“This wasn’t price-fixing. It was an industry-led, regulator-backed response to predatory lending,” added Sunu Widyatmoko, AFPI’s former deputy chairman (2019-20) and secretary general (2020-23).
OJK’s push for self-regulation amid legal vacuum
Widyatmoko explained that the 0.8% per day rate cap originated from consultations with OJK during the early years of the P2P industry’s growth. At that time, POJK 77/2016 provided a limited legal basis for the regulator to intervene directly in rate-setting.
“OJK asked us to introduce a visible distinction—if illegal lenders were charging 3-4% per day, legal platforms had to clearly price below that. We used the UK as a reference point for how to structure the policy, even though Indonesia’s financial literacy context was different,” Widyatmoko said.
The rate cap was formalised through AFPI’s code of conduct, signed by more than 150 platforms in 2018. However, the code has since been revoked after the regulatory authority shifted directly to OJK with the passage of the Financial Sector Development and Strengthening Law (UU P2SK) in 2023.
According to Kasim, the presence of the cap never eliminated pricing competition. “In reality, many players offered rates well below the ceiling, especially in the productive loan segment where risks tend to be lower,” he said.
In October 2021, amid ongoing regulatory discussions, OJK again requested AFPI to reduce the maximum interest rate cap—this time to 0.4% per day from 0.8%, to combat the ongoing battle with illegal lending platforms.
Under the updated legal framework, OJK now has the power to set and enforce lending rate caps. Through SEOJK No. 19/2023, OJK has established a phased rate reduction: 0.3% per day for consumptive loans over six months in 2024, 0.2% in 2025, and 0.1% by 2026, with productive loans capped at 0.1% starting 2024.
Now, the rate caps vary depending on the loan segment and tenor, whether it is above six months or below six months.
Kasim noted that OJK now collects regular data from platforms to monitor compliance and takes enforcement action when necessary. “If a platform breaches the cap, it risks written warnings, operational restrictions, and eventually license sanctions,” he said.
AFPI stated it has fully cooperated with KPPU throughout the investigation, which began nearly two years ago. The association is preparing legal counsel to clarify its role before the competition authority.
“This has been going on for almost two years. Most of our members have already responded to KPPU requests for data,” Kasim said. “We’ll explain that there was never an agreement between players to fix prices. What occurred was a necessary and regulator-mandated response to a market crisis.”
While AFPI supports a healthy regulatory environment, Widyatmoko acknowledged that blanket interest rate caps have had unintended effects on innovation.
“The drop from 0.8% to 0.4% wasn’t difficult for all players. It limited our ability to serve higher-risk segments of the population who are often underserved by conventional financial institutions,” he said.
“We want the opportunity to explore new models—to lend to higher-risk borrowers and see how we can manage it responsibly. But when caps are imposed across the board, it kills innovation before it even begins,” he concluded.
He added that a rate cap is still needed as a visible differentiator between legal and illegal platforms but must be balanced with commercial realities.
