Regulatory Framework for the Operation of Microfinance Institutions Updated

In an attempt to improve access to affordable financial services and funding for low-income individuals and micro-scale businesses, the Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) has finally issued Regulation No. 19/POJK.05/2021 on the Organization of the Business Operations of Microfinance Institutions (“Regulation 19/2021”), which will serve as a new legal framework for the operation of microfinance institutions (Lembaga Keuangan Mikro – “LKM”). Consequently, the issuance of Regulation 19/2021 now has repealed and replaced the previous framework of Regulation of the OJK No. 13/POJK.05/2014, which bore the same title (“Regulation 13/2014”).[1]