The Effectiveness and Urgency of Strengthening Fintech Lending Regulations for ConsumerProtection in Indonesia

Abstract

The rapid development of fintech lending services in
Indonesia has had a dual impact: on the one hand, it has
encouraged financial inclusion for communities not yet
covered by conventional banking, but on the other hand, it
has given rise to various legal issues that are detrimental to
consumers. The government has issued several regulations,
including POJK Number 77/POJK.01/2016, POJK
Number 6/POJK.07/2022, Law Number 4 of 2023
concerning the Development and Strengthening of the
Financial Sector (PPSK), and Law Number 27 of 2022
concerning Personal Data Protection. However, the rise of
illegal fintech, non-transparent interest rates, and misuse of
personal data indicate that existing regulations are not yet
fully effective. This study uses normative legal methods with
statutory, conceptual, and systematic approaches to analyze,
the effectiveness of fintech lending regulations in providing
legal protection for consumers; and the urgency of
strengthening these regulations in the face of the dynamics
of digital financial services. The results show that the
existing regulatory framework still faces obstacles in law
enforcement, limited oversight, overlapping authorities, and
low public digital literacy. Therefore, strengthening fintech
lending regulations is an urgent need to ensure legal
certainty and optimal consumer protection in the digital
economy era.