Overview

Earlier this year (2023), the government issued Law No. 4 of 2023 on the Development and Strengthening of the Financial Sector (“Law 4/2023”), which aims to reform the Indonesian financial sector through collaborative and interconnected efforts that are undertaken between actors operating within the financial sector and the financial services industry. In order to fulfill the mandates set out under Law 4/2023, the Financial Services Authority (Otoritas Jasa Keuangan – “OJK”) is now aiming to regulate the development and strengthening of microfinance institutions (Lembaga Keuangan Mikro – “LKM”) through the issuance of a new Draft Regulation, for which the public examination stage was concluded on 27 October 2023.[1]