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Indonesia is battling a wave of unlicensed "fintech" lenders who
avoid registering with authorities and often employ aggressive
debt collection practices.
"The borrower can borrow as much as they like because the lender
is not official. It's hard to reverse it," Pengerapan told
reporters.
"If the companies try to collect their debt, report them,
authorities will arrest them because they are not licensed."
Pengerapan encouraged consumers to first check whether the
company they were dealing with was among the 73 fintech
companies licensed by authorities.
Regulators have banned more than 400 fintech lenders for
operating without a license, with the communications ministry
then blocking their websites in Indonesia.
An investigation by Reuters in September found that many of
Indonesia's banned lenders had come from China following a
crackdown on the loosely regulated micro-credit sector there.
Four customers who failed to repay loans on time told Reuters
that Chinese fintech lenders took control of their phone
contacts – permission is granted when the app is installed - and
harassed colleagues and friends for repayment.
(Reporting by Fanny Potkin; Editing by Robert Birsel)
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