Can Indonesia strike a balance bewteen debt recovery and financial inclusion?

Check out our top articles for the week. [Read from your browser]( Top Stories of the Week Welcome to Tech in Asia's free Sunday newsletter! Get full access to our subscribers-only premium content and other insightful analysis on the big and messy topics of Asia’s tech and startup community by [registering here](. Hello {NAME} If you had asked me 10 years ago what my biggest fear was, I would’ve said the sight of beehives. But now that I’m the main provider for my family, the thought of unemployment terrifies me the most. This fear is exacerbated by seeing how some of my friends are struggling to pay off loan sharks, who can charge interest rates as high as 30% a month. These sharks will even go to borrowers’ houses and yell at them when collection time comes, and they must hand over the money to avoid social humiliation. The exorbitant rates of loan sharks stand in stark contrast to peer-to-peer online lenders in Indonesia, which previously charged as high as 12% a month or 0.4% a day. Despite this, borrowers still struggled with repayments, leading Indonesia’s financial authority - Otoritas Jasa Keuangan (OJK) - to cut interest rates to a more manageable range of 0.1 to 0.3% daily. However, the debt collection practices of online lenders are no less intense, often involving incessant phone calls and texts. Some borrowers have reported receiving threats and being verbally abused as collectors resort to tactics such as sending fake deliveries to their homes and coercing them to pay for these orders. As interest rates are lowered to reduce high default rates - an ongoing issue under scrutiny from OJK - online lending platforms may find themselves operating in less risky segments, which in turn will shrink their market. OJK is also increasing the minimum equity requirement and paid-up capital for these platforms and has instructed banks to cease lending to platforms facing defaults in repayments. That will only heap more pressure on the industry. -- [Budi Sutrisno]( journalist at Tech in Asia  --------------------------------------------------------------- TOP STORIES THIS WEEK 1️. [Indonesia puts more constraints on online lenders, but at what cost?]( The OJK is moving to protect borrowers, but the regulator’s actions could also curtail financial inclusion for an underserved segment of the market. 2. [This profitable SG firm combines mercenary approach with Amazon-like infrastructure]( Bld.ai has built a digital network of professional services providers and aims to undercut industry giants such as Accenture and Deloitte. 3. [Digital wealth platforms report growing AUM, but have yet to see profits]( New product offerings have led to a spike in AUM, and while players are not profitable yet, they claim they aren't far off. 4. [Hot or not: What SEA investors are betting on and what they’re ignoring]( VC funding can be a leading indicator of where in the tech industry we’re going to see more spending and jobs. 5. [Why Grab’s shares declined despite its ‘strong’ Q4 results]( Grab’s shares have underperformed US-listed peers like Uber and DoorDash over the past year despite having similar growth prospects. 6. [Cake Group CEO offers to sell stake to former CTO in court hearing]( Two months after filing an application to wind up Cake Group, former CTO U-Zyn Chua now has a chance to take over the crypto company. 7. [The hidden alliances between Southeast Asia’s VCs, uncovered]( We've visualized an intricate web of relationships among Southeast Asia’s VCs, using deal data in the past two years. 8. [Cracking the code of Southeast Asia’s unicorn founders]( Our data shows that Southeast Asia is home to 38 unicorn companies, but what do their founders have in common? 9. [These are the most active investors in Southeast Asia’s startups]( Which investors are writing the most checks to Southeast Asian startups? 10. [A Malaysian Web3 pioneer defies downturn with 33x profit surge since 2019]( The popular Web3 analytics tool for Ethereum helped push the net profit of its parent firm up 33x in just four years. --------------------------------------------------------------- SAIGON SUMMIT 2024: CHARTING VIETNAM’S TECH FUTURE  Sneak peek of who you’ll meet on May 30 Anytime you want to learn something, you always go to the experts, the cream of the crop. 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