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🇮🇩 Indonesia /Economy & Trade

Indonesian Regulator Prepares Roadmap to Boost Islamic Fintech Sector

From Republika · () Indonesian

Translated from Indonesian and summarized by DistantNews. Read the original for the full story.

At a glance

News Sources not specified New plan
  • Indonesia's Islamic financial sector, particularly in Peer-to-Peer Lending (PVML), significantly lags behind its conventional counterpart.
  • The OJK is developing a roadmap to bolster the Islamic PVML industry, aiming to increase public trust and accelerate growth.
  • Current challenges include low public confidence in Islamic financial products and services, despite efforts to expand the sector.

Indonesia's Financial Services Authority (OJK) is preparing a strategic roadmap to address the considerable disparity between the Islamic and conventional sectors within the Peer-to-Peer Lending (PVML) industry. Agusman, the Head of Banking Supervision for PVML and other financial services, expressed concern over the slow growth of Islamic finance in the country.

Data from the OJK reveals a stark difference in asset size and financing. The total assets of the PVML industry stand at Rp 1.157.74 trillion, with conventional assets accounting for Rp 1.022.85 trillion, while Islamic assets total only Rp 134.89 trillion. Similarly, conventional financing reaches Rp 939.04 trillion, compared to Rp 125.21 trillion for Islamic financing. The industry comprises 749 players, of which 650 are conventional and 99 are Islamic.

Now OJK is making a roadmap for Islamic PVML. Perhaps in a few months, we will launch it. Because now is the right time, at a time when there are many problems related to Sharia and there will be this roadmap.

— AgusmanHead of Banking Supervision at OJK, announcing the development of a roadmap for Islamic PVML.

Agusman noted that the annual growth of the Islamic sector is "very thin, very thin." He identified a primary challenge as the lack of public trust in Islamic products and services. "Now OJK is making a roadmap for Islamic PVML. Perhaps in a few months, we will launch it. Because now is the right time, at a time when there are many problems related to Sharia and there will be this roadmap," Agusman stated during a forum discussion with media editors.

The OJK hopes that the new roadmap will provide concrete steps to strengthen the Islamic financial industry. By addressing existing issues and enhancing public confidence, the authority aims to foster a more robust and competitive Islamic PVML sector. The initiative underscores the government's commitment to developing Islamic finance, which plays a significant role in the world's largest Muslim-majority nation.

The annual growth is very thin, very thin. Among other things, because why? People often don't trust us.

— AgusmanExplaining the slow growth of the Islamic PVML sector and citing public trust as a key issue.
About this summary

Originally published by Republika in Indonesian. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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