Circular Letter of the Financial Services Authority Number 35/SEOJK.06/2025 on the Assessment of the Health Level of Pawn Companies and Sharia Pawn Companies

Circular Letter of the Financial Services Authority Number 35/SEOJK.06/2025 regarding the Assessment of the Health Level of Pawn Companies and Sharia Pawn Companies

Abstract: This Circular Letter of the Financial Services Authority is drafted based on the mandate of Article 196 paragraph (3) and Article 203 paragraph (8) of Financial Services Authority Regulation Number 39 of 2024 as amended by Number 29 of 2025 regarding Pawn (State Gazette of the Republic of Indonesia Year 2025 Number 39/OJK, Addition to the State Gazette of the Republic of Indonesia Number 168/OJK).

This Circular Letter of the Financial Services Authority regulates several matters as follows: a. general principles in conducting assessments of the health level of Pawn Companies and Sharia Pawn Companies (the Company), namely risk-oriented, proportionality, materiality and significance, and comprehensive and structured; b. procedures for assessing the health level of the Company, including: 1) the Company conducts health level assessments to determine actual performance with an assessment scope covering capital factors, funding quality, profitability, liquidity, and management; 2) assessments of each factor are conducted using quantitative aspects and qualitative aspects; and 3) the health level assessment is established into 5 (five) composite ratings; c. assessment of the capital factor includes assessment of capital adequacy, projections, and the ability to anticipate risks; d. assessment of the loan receivables quality factor includes assessment of loan receivables quality components, risk exposure concentration, adequacy of policies and procedures, loan granting documentation; and performance in handling problematic loan receivables balances; e. assessment of the profitability factor includes assessment of the ability of productive assets to generate profit and the level of operational efficiency; f. assessment of the liquidity factor includes assessment of the ability to meet short-term and long-term obligations, the potential for mismatches between short-term and long-term obligations, and the adequacy of liquidity management policies; and g. assessment of the management factor includes assessment of general management quality components, including the implementation of commitments to the Financial Services Authority or other parties; implementation of risk management, particularly management's understanding of the Company's risks; and the Company's compliance with Sharia Principles and the implementation of social functions, for Sharia Pawn Companies.

The legal basis for this Circular Letter of the Financial Services Authority is: POJK No. 39 of 2024 as amended by No. 29 of 2025. The Financial Services Authority may conduct verification and validation of the truthfulness and fairness of data serving as the basis for calculating the Health Level assessment factors compiled by the Company.

Note: This Circular Letter of the Financial Services Authority takes effect on the date of establishment. This Circular Letter of the Financial Services Authority was established on December 1, 2025. Companies must meet Health Level requirements of at least Composite Rating 3.