Association to Establish Code of Ethics for Fintech Lending

Association to establish code of ethics for fintech lending The Indonesian Financial Technology Association (Aftech) has developed its business code of ethics to be implemented by financial technology (fintech) peer-to-peer lending.

Aftech director of public policy M. Ajisatria Sulaeman said on Wednesday that the document had been finalized and distributed to its association members.

He added that the document had been approved by the Financial Services Authority (OJK) on Tuesday, and together with the OJK, they were discussing an upcoming official signing event.

“We are discussing the launching with the OJK. It will probably be held in Manado, North Sulawesi, on Aug. 8 or earlier,” he said as quoted by kontan.co.id on Wednesday.

The code of ethics regulates several requirements, including information disclosure and the loan mechanism for users prior to using fintech lending services; rights and obligations for the lenders and loan receivers; information disclosure regarding cost, interest rate and loan risk; disclosure on non-performing loans (NPL); banning information that misleads users; establishment of service complaints; rules in utilizing consumers’ personal data; obligation to improve financial literacy and inclusion; and sanctions for fintech companies that violate the code of ethics.

In addition, the association will establish a committee of ethics to oversee the code of ethics implementation, Ajisatria said.

The code of ethics preparation is a response to the controversial mechanism in collecting debts conducted by fintech RupiahPlus lately. The fintech firm has contacted colleagues of the debtors–who have not yet paid their debts–who are not registered in the debtors’ emergency contacts.

The case has triggered not only the fintech association but also the authority to improve consumers’ protection. Likewise, the OJK is in the process of preparing a circular concerning mechanisms on collecting debts for fintech firms. Association to establish code of ethics for fintech lending  (sau/dmr, The Jakarta Post)