Indonesian fintech major Ovo today announced that its peer-to-peer lending arm Taralite has been awarded a business license by the Indonesia Financial Services Authority (OJK).
Officially operating as an IT-based lending provider, Ovo and Taralite said they will continue to work with the government to bring Indonesia’s micro, small, and medium enterprises closer to digital financial services.
According to Indonesia’s central statistics agency, MSMEs contribute roughly 60% of Indonesia’s GDP and absorbs over 97% of the national workforce. As of last year, however, more than 77% of Indonesians were reportedly unbanked or underbanked.
“We hope that this [license acquisition] will boost financial inclusion rates and help the financial landscape in Indonesia become less fragmented,” said Ovo CEO Jason Thompson.
Taralite, which was founded in 2015, was acquired by Ovo last year as part of its plans to expand its reach into financial services. It also recently launched DanaTara, a service that gives MSMEs access to financing of up to 500 million rupiah (about US$35,600) with terms of up to 12 months.
Ovo claims that the amount of loans disbursed by Taralite has grown by nearly 50% since the start of 2020. It also said that it has an ecosystem of about 500,000 MSMEs so far.
The OJK started officially regulating online lending services in 2017, recognizing the industry’s rapid growth over the previous years.
The regulation requires service providers to have 1 billion rupiah (US$71,300) in capital and prohibits them from conducting other businesses outside of P2P lending, such as acting as a lender or borrower themselves, among others.
Other companies that have recently acquired OJK licenses this month are Pinjam Modal, Danarupiah, Pinjamwinwin, Julo, Indodana, Awantunai, and Alami.
In October last year, OJK also issued licenses to six other fintech firms, including Modalku (aka Funding Societies) and Finmas, among others.