Amendment to Financial Services Authority Regulation Number 13/POJK.05/2014 Concerning the Conduct of Business by Microfinance Institutions

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
FINANCIAL SERVICES AUTHORITY REGULATION
NUMBER 62 /POJK.05/2015
CONCERNING
AMENDMENT TO THE FINANCIAL SERVICES AUTHORITY REGULATION NUMBER 13/POJK.05/2014 CONCERNING THE CONDUCT OF BUSINESS BY MICROFINANCE INSTITUTIONS BY THE GRACE OF THE MOST HIGH GOD THE COMMISSIONERS COUNCIL OF THE FINANCIAL SERVICES AUTHORITY, Considering: a. that in order to encourage the development of microfinance institutions, it is necessary to improve the provisions regarding the conduct of business by microfinance institutions; b. that based on the considerations as referred to in letter a, it is necessary to establish a Financial Services Authority Regulation concerning Amendment to the Financial Services Authority Regulation Number 13/POJK.05/2014 concerning the Conduct of Business by Microfinance Institutions; Recalling: 1. Law Number 21 of 2011 concerning the Financial Services Authority (State Gazette of the Republic of Indonesia Year 2011 Number 111, Supplement to the State Gazette of the Republic of Indonesia Number 5253);
2. Law Number 1 of 2013 concerning Microfinance Institutions (State Gazette of the Republic of Indonesia Year 2013 Number 12, Supplement to the State Gazette of the Republic of Indonesia Number 5394);
3. Government Regulation Number 89 of 2014 concerning Loan Interest Rates or Financing Returns and the Scope of Business Areas of Microfinance Institutions (State Gazette of the Republic of Indonesia Year 2014 Number 321, Supplement to the State Gazette of the Republic of Indonesia Number 5616);
4. Financial Services Authority Regulation Number 13/POJK.05/2014 concerning the Conduct of Business by Microfinance Institutions (State Gazette of the Republic of Indonesia Year 2014 Number 343, Supplement to the State Gazette of the Republic of Indonesia Number 5622);
DECIDING:
Establishing: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING AMENDMENT TO THE FINANCIAL SERVICES AUTHORITY REGULATION NUMBER 13/POJK.05/2014 CONCERNING THE CONDUCT OF BUSINESS BY MICROFINANCE INSTITUTIONS.
Article I
Several provisions in the Financial Services Authority Regulation Number 13/POJK.05/2014 concerning the Conduct of Business by Microfinance Institutions (State Gazette of the Republic of Indonesia Year 2014 Number 343, Supplement to the State Gazette of the Republic of Indonesia Number 5622) are amended as follows:

1. The provisions of Article 2 are added with 1 (one) new paragraph, namely paragraph (2a), so that Article 2 reads as follows:
   Article 2
   (1) Business activities of MFIs include business development and community empowerment services, both through Loans or Financing in micro-scale businesses to members and the public,

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  savings management, as well as providing business development consulting services.
  (2) Business activities as referred to in paragraph (1) can be conducted conventionally or based on Sharia Principles.
  (2a) In addition to business activities as referred to in paragraph (1), MFIs may conduct fee-based activities as long as they do not conflict with provisions of legislation in the financial services sector.

2. The provisions in Article 7 paragraph (2) remain unchanged with the amendment of the Explanation of Article 7 paragraph (2) to be as implemented in the paragraph-by-paragraph explanation of this OJK Regulation.
3. The provisions of paragraph (4) and paragraph (5) of Article 13 are amended, so that Article 13 reads as follows:
   Article 13
   (1) MFIs conducting business activities based on Sharia Principles are required to use contracts that are in accordance with Sharia Principles.
   (2) Contracts that are in accordance with Sharia Principles as referred to in paragraph (1) include:
   a. savings collection business activities are conducted using wadiah, mudharabah, or other contracts that do not conflict with Sharia Principles and are approved by OJK. b. financing disbursement business activities are conducted using mudharabah, musyarakah, murabahah, ijarah, salam, istishna, ijarah muntahiah bit tamlik, or other contracts that do not conflict with Sharia Principles and are approved by OJK.

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  c. consulting and business development service activities are conducted using ijarah, ju’alah, or other contracts that do not conflict with Sharia Principles and are approved by OJK.
  d. funding activities through loan receipts are conducted using qordh, mudharabah, musyarakah, or other contracts that do not conflict with Sharia Principles and are approved by OJK. (3) To obtain approval as referred to in paragraph (2), MFIs submit an application to OJK by attaching a fatwa from the DSN MUI. (4) In addition to conducting business activities as referred to in paragraph (1) and paragraph (2), MFIs conducting business activities based on Sharia Principles may manage social and charitable funds in the form of zakat, infak, sedekah, and waqaf in accordance with applicable legislation. (5) Bookkeeping for the management of social and charitable funds as referred to in paragraph (4) is conducted separately.

4. The provisions of Article 17 are added with 1 (one) new paragraph, namely paragraph (1a), so that Article 17 reads as follows:
   Article 17
   (1) The solvency ratio as referred to in Article 15 is calculated by comparing total assets with total liabilities.
   (1a) For MFIs conducting business activities based on Sharia Principles, the solvency ratio as referred to in paragraph (1) is calculated by comparing total assets with total liabilities and temporary partnership funds in accordance with applicable Sharia financial accounting standards. (2) MFIs are required to maintain the solvency ratio as referred to in paragraph (1) of at least 110% (one hundred ten percent).
   Article II
   This OJK Regulation takes effect on the date of its enactment.
   To ensure that everyone knows it, it is ordered to enact this OJK Regulation by placing it in the State Gazette of the Republic of Indonesia.
   Determined in Jakarta on 23 December 2015
   CHAIRMAN OF THE COMMISSIONERS COUNCIL
   FINANCIAL SERVICES AUTHORITY, signed
   MULIAMAN D. HADAD
   Enacted in Jakarta on 29 December 2015
   MINISTER OF LAW AND HUMAN RIGHTS
   REPUBLIC OF INDONESIA, signed
   YASONNA H. LAOLY
   STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2015 NUMBER 413 Copy in accordance with the original Director of Law 1 Ministry of Law signed Sudarmaji