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“It takes money to make money”--Sol Luckman was right. And in a developing Indonesia, this is especially true. Funds are not only needed for Indonesia’s development process but also for its society to fulfill daily needs or to increase business opportunities. Therefore, a reliable financial information service system embedded within a comprehensive, integrated finance sector is needed in order to ensure smooth process provisions for funds. Of course, this will in turn encourage and develop institutional risk management implementation within financial services as well as support effective supervision within the sector.
The Financial Information Services System or Sistem Layanan Informasi Keuangan ("SLIK"), an enhancement from the Debtor Information System or Sistem Informasi Debitur (SID) under the authority of Bank Indonesia (“BI”) as stipulated in the BI Regulation No. 9/14/PBI/2007, is an information system managed by OJK to support the implementation of supervisory duties and services in the field of finance. The SLIK is an important infrastructure within the financial services sector that can be utilized by industries to mitigate risk, particularly credit risk so as to help reduce the problematic level of credit default. In addition, the existence of the SLIK also supports the expansion of credit access and financing.
The fundamental regulations of the SLIK are based on the Regulation of OJK No. 18/POJK.03/2017 concerning Reporting and Requirement Of Debtor Information Through The Financial Information Service System (“POJK 18/2017”), which has been running effectively since January 2018.
There are several parties required to become a Reporting Party/Rapporteur namely:a. Commercial banks;
d. Financing Institution providing Facility Provision of Funds; and
e. Other Financial Services Institutions that provide the Fund Provision Facility, including Fintech
Peer-to-Peer Lenders but excluding microfinance institutions.
Furthermore, other financial services institutions that provide technology-based lending and borrowing services information, which in this matter are considered Fintech Peer-to-Peer Lenders, can become a Rapporteur by applying and obtaining OJK approval by fulfilling the following requirements:a. Possess adequate infrastructure including organizational structure, human resources, computer devices, and data communication networks required in SLIK;
b. Have the required data in SLIK; and
c. Sign a participation agreement on reporting and requesting Debtor Information through SLIK.
The Reporting Party shall submit the Report of the Borrower Financial Information to OJK no later than the end of each month, and it must be complete, accurate, current, and timely. The report must contain the following information:a. Debtor;
b. Facilities Provision of Funds;
e. Caretaker and owner; and
f. Debtor's finances, shall be reported in the event that the Debtor is a company or a party who received the Fund Provision Facility from 1 (one) Rapporteur and/or co-financing more than 1 (one) Rapporteur, with the total amount of the Facility Provision of Funds at least equal to Rp5.000.000.000,- (five billion Rupiah).
The Debtor Report is reported by the Head Office of the Reporting Party to OJK via online and must include information from the Reporting Party's headquarters and all branch offices. Moreover, the Reporting Party is obliged to notify the Debtor of the delivery of his/her Report to SLIK.
The presence of Fintech Peer-to-Peer Lending is still relatively new in the Indonesian financial services industry. However, the rapidly growing number of fintech players with potential users or customers shows significant progress. In fact, OJK data noted that there are 32 fintech companies already registered with OJK as of January 25, 2018.
The presence of SLIK is believed to be very useful for the parties, not only for the financial service institutions but also the general public because of the quality credit ratings presented in its report. OJK also coordinates with a number of other agencies ranging from BI, Deposit Insurance Corporation or Lembaga Penjamin Simpanan (LPS), Financial Transaction Reporting Analysis Center or Pusat Pelaporan Analisis Transaksi Keuangan (PPATK), Directorate General of Taxation or Direktorat Jenderal Pajak (DJP) to other institutions or agencies including those in the private sector (Information Credit Management Institution or Lembaga Pengelola Informasi Perkreditan/LPIP) in the field of credit scoring.
Deputy Commissioner of OJK Banking Supervision I, Boedi Armanto said that Fintech Peer-to Peer-Lenders are only able to become SLIK rapporteurs if they comply with the mandatory deadline to report by December 31, 2022. The Reporting Party shall submit the Debtor Report monthly no later than the 12th of the ensuing month after the month of the Debtor Report. Currently, fintech lenders are only allowed to report service user data for Peer-to Peer-Lending, especially since the purpose of the SLIK is to enrich the credit rating data previously known as 'BI Checking'. If it does not report user or customer data, Fintech Peer-to-Peer Lenders are prohibited from accessing the SLIK owned by OJK.
The Reporting Party that has fulfilled its reporting obligations may request Debtor Information from OJK via online through the SLIK. The Reporting Party is prohibited from using the Debtor Information for any other purposes other than for the context of:a. Supporting the smoothness of the Facilities Provision of Funds granting process;
b. Implementing risk management; and/or
c. Identifying the quality of the Debtor according to OJK fulfillment or other authorized party provisions.
The Parties who may request Debtor Information are:a. The Rapporteur;
b. Debtor, in the event that the Reporting Party refuses to provide the Facility Provision of Funds to Debtors or prospective Debtors on the basis of Debtor Information, the Reporting Party shall provide written explanation to the Debtors or prospective Debtors;
c. LPIP; and
d. Other parties.
The Scope of Debtor Information that may be requested by the parties includes:
a. Debtor identity;
b. Owners and managers of the Debtor’s business entity;
c. Provision of Fund Facility received by Borrower;
f. Quality of the Provision of Funds Facility; and
g. Other information.
With the opening of the SLIK access to a number of agencies, OJK hopes the database collected shall accurately illustrate credit risk and credit quality, whether for individuals or corporate debtors. This curation and data validity in the SLIK will demonstrate broad applicability and benefit because installment payment data such as telephone, electricity, water, and BPJS will be included to allow a real-time snapshot of a debtor’s monthly payment performance in order to assess a debtor’s ability to pay timely.
Overall, the spirit and intention behind the SLIK was to mitigate the risk of debtor default for lenders and other financial services organizations. The relationship between the SLIK and Fintech Peer-to-Peer Lenders brings together the recipients of the funds (debtor/borrower) and the owners of the funds (lender/investor) via online platforms. Hence, careful attention must be paid to provide clear and accurate borrower information in order to protect lenders, investors, and other financial services institutions from granting credit to unqualified or unproven borrowers who may potentially contribute to financial loss due to poor performance.
No doubt, a central form of standard reporting provides an added layer of security for all involved. With the SLIK, the process of providing funds in Indonesia can be expedited, encouraging economic growth, reducing the risk of illegal investment, and protecting communities so that Indonesia can achieve its national development goals.