MICROCAPITAL BRIEF: Otoritas Jasa Keuangan (OJK) to Lead Supervision of Microfinance Institutions (MFIs) in Indonesia

Otoritas Jasa Keuangan (OJK), the Indonesian government agency that regulates the country’s financial sector, reportedly has signed a cooperation agreement with the Ministry of Home Affairs, the Indonesian government agency in charge of domestic issues, and the Ministry of Cooperative and Small and Medium Enterprises, an Indonesian regulator of smaller businesses, in an effort to improve the regulation and supervision of microfinance institutions (MFIs) in Indonesia [1][2]. As of January 2015, OJK will serve as the primary supervisor of MFI activities. One of the first steps to be taken by OJK will be to document the number of MFIs in the country in an effort to “soon develop mapping, a capacity building program, and legal frameworks for the institutions.”

The cooperation agreement among the government agencies reportedly comes as a result of a failure of regional and city administrators to effectively supervise MFIs’ activities. OJK chairman Mr Muliaman Hadad expressed hope that “coordination between the OJK and ministry can be more effective [at addressing these issues]” [1].

By Benjamin Krupp, Research Associate

About Otoritas Jasa Keuangan (OJK)

Otoritas Jasa Keuangan (OJK) is a government institution in Indonesia that is charged with the regulation of financial services. OJK and Bank Indonesia together regulate banking in the country. As of 2015, OJK is slated to lead the regulation of microfinance institutions in Indonesia.

Sources and Additional Resources

[1] The Jakarta Post: OJK, Ministries Team Up to Handle Microfinance Institutions

[2] Portal Nasional Republik Indonesia: State Ministry of Cooperatives & SMEs

MicroCapital, January 13, 2014: Dutch Development Bank Nederlandse Financierings-Maatschappijvoor Ontwikkelingslanden (FMO) Planning to Loan $10m to Bank Andara of Indonesia for On-lending to Microfinance Institutions (MFIs)

MicroCapital, October 8, 2013: Indonesia’s Otoritas Jasa Keuangan to Regulate Microfinance Institutions Beginning in 2015

MicroCapital, September 27, 2010: Government of Indonesia Signs Memorandum of Understanding with Indonesian Microfinance Institutions and Small and Medium-Sized Enterprises to Update Provisions for Microfinance, Accelerate Disbursement of $1.45b in Government-Sponsored Microloans

MicroCapital Universe Profile: Otoritas Jasa Keuangan (OJK)

Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/

 

 

 

Similar Posts: