New OJK Regulation on Alternative Credit Scoring

After concluding its assessment of the alternative credit scoring business model under the sandbox regime in 2024, Indonesia’s Financial Services Authority (OJK) has issued a new regulation on the licensing of alternative credit scoring providers (ACS Providers). The new regulation – OJK Regulation No. 29 of 2024 – took effect on 20 December 2024. 

Some of the key points to note are as follows.

1. Paid-up capital. ACS Providers must be limited liability companies with minimum paid-up capital of Rp.5 billion (around US$305,000). The funds for the capital injection must not be sourced from loans.  
2. Foreign ownership. The maximum (direct and indirect) foreign ownership limit in ACS Providers is 85%, but this limit does not apply to publicly listed ACS Providers. 
3. BOD and BOC. ACS Providers must have at least two directors and one commissioner. At least one of the directors must have knowledge and/or experience in the credit rating, information technology, and/or financial services industry. 
4. Foreign employees. ACS Providers may have foreign employees in positions one level below the BOD and/or as experts or consultants. Each foreign employee must work alongside one Indonesian employee, with their knowledge being transferred to the Indonesian employee. Foreign employees cannot hold human resources or compliance roles. 
5. Licensing and fit and proper test. ACS Providers must obtain a licence from OJK and register as electronic system operators with the Ministry of Communication and Digital Affairs. In addition, the “main parties” (pihak utama) of ACS Providers - ie parties that own, manage, supervise and/or have significant influence over ACS Providers – must also pass OJK’s fit and proper test. 
6. Data centres, disaster recovery centres and electronic systems. ACS Providers must place their data centres and disaster recovery centres in a separate location in Indonesia. The new regulation expressly allows ACS Providers to engage the services of other parties in relation to non-critical electronic systems (eg for testing the system capabilities and security of their data processing, helpdesk and consumer complaints services). 
7. Credit score requirements. ACS Providers should produce credit scores using alternative data (ie data other than credit or financing data) and are prohibited from using credit or financing data (ie data concerning the state of the debtor’s or customer’s financing facility). The credit scores must satisfy the prescribed criteria, including being presented in the Indonesian language or, if required by customers, in bilingual format.
8. Transitional provisions. Existing providers of innovative credit scoring services that are registered with OJK must apply for a licence in accordance with the new regulation by 20 December 2025. They must also comply with the new foreign ownership limit within one year after obtaining their licence from OJK. 

Given the increasing importance of alternative credit scoring to Indonesia’s financial services sector, this is an area we are monitoring closely.