Financial Services Authority Regulation Number 10 of 2021 Concerning Business Licensing and Institutional Organization of Microfinance Institutions

FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA
COPY
FINANCIAL SERVICES AUTHABILITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 10/POJK.05/2021
CONCERNING
BUSINESS LICENSING AND INSTITUTIONAL ORGANIZATION OF MICROFINANCE INSTITUTIONS BY THE GRACE OF THE ALMIGHTY GOD, THE COMMISSIONERS OF THE FINANCIAL SERVICES AUTHORITY, Considering:
a. that in order to facilitate the licensing process, harmonize policies, and encourage the development of healthy and accountable microfinance institutions, and to implement the provisions of Article 7 paragraph (2), Article 10, Article 22 paragraph (2), Article 23 paragraph (3), Article 27, and Article 33 paragraph (3) of Law Number 1 of 2013 concerning Microfinance Institutions, the Financial Services Authority Regulation Number 12/POJK.05/2014 concerning Business Licensing and Institutional Organization of Microfinance Institutions has been established, as amended by the Financial Services Authority Regulation Number 61/POJK.05/2015 concerning Amendments to the Financial Services Authority Regulation Number 12/POJK.05/2014 concerning Business Licensing and Institutional Organization of Microfinance Institutions; b. that in order to encourage the development of healthy and accountable microfinance institutions, the Financial Services Authority Regulation Number 12/POJK.05/2014 concerning Business Licensing and Institutional Organization of Microfinance Institutions, as amended by the Financial Services Authority Regulation Number 61/POJK.05/2015 concerning Amendments to the Financial Services Authority Regulation Number 12/POJK.05/2014 concerning Business Licensing and Institutional Organization of Microfinance Institutions, is no longer in line with legal developments and needs;
c. that based on the considerations referred to in letters a and b, it is necessary to establish a Financial Services Authority Regulation concerning Business Licensing and Institutional Organization of 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 Coverage 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);
   DECIDING:
   Establishing: FINANCIAL SERVICES AUTHORITY REGULATION CONCERNING BUSINESS LICENSING AND INSTITUTIONAL ORGANIZATION OF MICROFINANCE INSTITUTIONS.

CHAPTER I
GENERAL PROVISIONS
Article 1
In this Financial Services Authority Regulation, the following terms are defined as:

1. Microfinance Institutions, hereinafter abbreviated as MFI, are financial institutions specifically established to provide business development services and community empowerment, either through loans or financing in micro-scale businesses to members and the public, managing deposits, or providing business development consulting services, which are not solely profit-seeking.
2. Loan is the provision of funds by the MFI to the public that must be repaid according to the agreement.
3. Financing is the provision of funds by the MFI to the public that must be repaid according to the agreement with Sharia principles.
4. Deposits are funds entrusted by the public to the MFI in the form of savings and/or fixed deposits based on a fund storage agreement.
5. Depositor is a party that places its funds with the MFI based on an agreement.
6. Sharia Principles are Islamic legal provisions based on fatwas or statements of Sharia compliance from the National Sharia Board of the Indonesian Ulema Council.
7. Board of Directors is a corporate organ authorized and fully responsible for managing the corporation for the interests of the corporation, in accordance with the purpose and objectives of the corporation and representing the corporation, both in and out of court, according to the articles of association for MFIs in the form of limited liability companies or equivalent to the Board of Directors for MFIs in the form of cooperative legal entities.
8. Board of Commissioners is a corporate organ tasked with conducting general and/or specific supervision according to the articles of association and providing advice to the Board of Directors for MFIs in the form of limited liability companies or equivalent to the Board of Commissioners for MFIs in the form of cooperative legal entities.
9. Sharia Supervisory Board, hereinafter abbreviated as DPS, is a board that has the task and function of supervision and providing advice to the Board of Directors regarding the implementation of MFI activities to ensure compliance with Sharia Principles.

CHAPTER II
LEGAL FORM, OWNERSHIP, CAPITALIZATION, AND BUSINESS LICENSING First Section Legal Form and Ownership
Article 2
(1) The legal forms of MFIs consist of:
a. cooperatives; or b. limited liability companies.
(2) The limited liability company referred to in paragraph (1) letter b, at least 60% (sixty percent) of its shares must be owned by district/city governments or village/village enterprise entities. (3) The remaining share ownership of the limited liability company referred to in paragraph (2) may be owned by:
a. Indonesian citizens; and/or b. cooperatives.
(4) Ownership of each Indonesian citizen over the shares of the limited liability company referred to in paragraph (3) letter a is prohibited from exceeding 20% (twenty percent).
Article 3
MFIs are prohibited from being owned by parties other than:
a. Indonesian citizens; b. village/village enterprise entities;
c. district/city governments; and/or
d. cooperatives.
Article 4
MFIs are prohibited from being owned, directly or indirectly, by foreign citizens and/or business entities that are partially or wholly owned by foreign citizens or foreign business entities.

Second Section
Capitalization
Article 5
(1) Paid-up capital or principal deposits, mandatory savings, and grants of MFIs are determined based on business coverage covering villages/villages, districts, or regencies/cities. (2) The amount of paid-up capital or principal deposits, mandatory savings, and grants for MFIs applying for business licenses is set at a minimum:
a. IDR 300,000,000.00 (three hundred million rupiah), for village/village business coverage; b. IDR 500,000,000.00 (five hundred million rupiah), for district business coverage; or
c. IDR 1,000,000,000.00 (one billion rupiah), for regency/city business coverage.
(3) At least 50% (fifty percent) of paid-up capital or principal deposits, mandatory savings, and grants must be used for working capital. (4) MFI capital contributions referred to in paragraph (2) must meet the following requirements:
a. not derived from loans; and b. not derived from or for money laundering and/or terrorism financing crimes.
(5) Further provisions regarding the calculation method for working capital referred to in paragraph (3) are determined by the Financial Services Authority.

Third Section
Business Licensing
Article 6
(1) MFIs intending to conduct business activities must have a business license from the Financial Services Authority.
(2) MFIs may conduct business activities conventionally or based on Sharia Principles.
(3) To obtain the business license referred to in paragraph (1), the MFI's Board of Directors must submit a license application to the Financial Services Authority according to Format 1 contained in the Appendix, which is an integral part of this Financial Services Authority Regulation, accompanied by:
a. the deed of establishment of the legal entity including the articles of association and any amendments (if any) that have been approved/approved by the competent authority or reported to the competent authority, at a minimum containing:

1. name and domicile;
2. business activities as an MFI conventionally or based on Sharia Principles;
3. capitalization;
4. ownership; and
5. authority, responsibilities, and term of office of the Board of Directors, Board of Commissioners, and DPS;
   b. data of the Board of Directors, Board of Commissioners, and DPS including:
6. photocopy of identification documents in the form of Identity Cards;
7. curriculum vitae;
8. a stamped letter of statement from the Board of Directors, Board of Commissioners, and DPS stating:
   a) are not included in the list of parties prohibited from becoming principal managers; b) are not recorded in the list of non-performing loans in the financial services sector; c) have never been sentenced for committing criminal offenses in the field of financial services and/or economic business based on court decisions that have permanent legal force; d) have never been sentenced for committing criminal offenses based on court decisions that have permanent legal force within the last 5 (five) years; e) have never been declared bankrupt or caused a business entity to be declared bankrupt based on court decisions that have permanent legal force within 5 (five) years; f) do not hold concurrent positions as Directors in other MFIs for Directors; g) do not hold concurrent positions as Commissioners in more than 2 (two) other MFIs for Directors; and h) do not hold concurrent positions as Commissioners in more than 3 (three) other MFIs for Commissioners;
9. a letter of statement from the Board of Directors stating that they are willing to manage and administer the MFI responsibly and in accordance with applicable laws and regulations;
10. a letter of certificate or written proof of operational experience in the field of microfinance institutions or other financial services institutions for at least 1 (one) year for one of the Directors; and
11. a letter of certificate or written proof of operational experience in the field of microfinance institutions conducting business based on Sharia Principles or other Sharia financial services institutions for at least 1 (one) year for one of the Directors, for MFIs conducting business based on Sharia Principles;
    c. data of shareholders or members:
12. in the case where shareholders or members are individuals, documents attached include a photocopy of identification documents in the form of Identity Cards and a stamped letter of statement stating that the capital contribution:
    a) is not derived from loans; and b) is not derived from or for money laundering and/or terrorism financing crimes, for shareholders of MFIs in the form of limited liability companies or for founding members of MFIs in the form of cooperative legal entities.
13. in the case where shareholders are village/village enterprise entities and/or cooperatives, documents attached include:
    a) the deed of establishment including the articles of association and any amendments (if any) that have been approved by the competent authority or reported to the competent authority, or proof of establishment of village/village enterprise entities; b) audited financial statements or the latest financial statements or accounting records; c) photocopy of identification documents in the form of Identity Cards for directors or managers of village/village enterprise entities and/or cooperatives; and d) a stamped letter of statement stating that the capital contribution:

1. is not derived from loans; and
2. is not derived from or for money laundering and/or terrorism financing crimes;

3. in the case where shareholders are district/city governments, documents attached include district/city regulations regarding capital participation in MFIs;
   d. a recommendation letter for the appointment of the DPS from the National Sharia Board of the Indonesian Ulema Council and/or DPS training certificates from the National Sharia Board of the Indonesian Ulema Council for MFIs conducting business based on Sharia Principles; e. organizational structure and management, at minimum having credit decision, collection, and administration functions; f. MFI work systems and procedures, at minimum:
4. granting Loans or Financing;
5. receiving and closing Deposits for MFIs conducting deposit-taking business;
6. collection from borrowers or financing recipients; and
7. resolution of non-performing receivables;
   g. work plan for the first 2 (two) years, at minimum containing:
8. Loan or Financing disbursement targets;
9. Deposit management targets for MFIs conducting deposit-taking business; and
10. activity steps to achieve the aforementioned targets,
    for MFIs with regency/city business coverage; h. proof of fulfillment of paid-up capital or principal deposits, mandatory savings, and grants made in cash in the form of photocopies of valid fixed deposits:
11. in the name of the MFI; or
12. in the name of one of the Directors, accompanied by a letter of statement from the Directors,
    in one of the banks in Indonesia or one of the Sharia banks or Sharia business units in Indonesia for MFIs conducting business based on Sharia Principles;
    i. proof of operational readiness in the form of:
13. list of fixed assets (if any) and inventory;
14. proof of ownership or control of the office; and
15. list of branch offices and addresses (if any); and
    j. opening financial position report.

Article 7
(1) The Financial Services Authority provides approval or rejection of the business license application referred to in Article 6 paragraph (3) within a maximum period of 20 (twenty) working days since the complete business license application was received. (2) To provide approval or rejection of the business license application, the Financial Services Authority conducts:
a. examination of document completeness; b. feasibility analysis of the work plan; and
c. analysis of compliance with laws and regulations in the field of MFIs.
(3) If necessary, the Financial Services Authority may conduct verification and interviews.
(4) Rejection of the business license application is accompanied by reasons for rejection.
(5) In the event that an MFI's business license application is rejected, the applicant may resubmit the MFI business license application as referred to in Article 6 paragraph (3). (6) The business license from the Financial Services Authority must be displayed at the MFI office.

Article 8
(1) In the event that an MFI applies for a business license with non-cash capital contributions, the business license application is submitted according to Format 2 contained in the Appendix, which is an integral part of this Financial Services Authority Regulation, accompanied by:
a. the deed of establishment of the legal entity including the articles of association and any amendments (if any) as referred to in Article 6 paragraph (3) letter a; b. closing financial position report and opening financial position report from the MFI;
c. audited annual financial statements for MFIs with assets of at least IDR 1,000,000,000.00 (one billion rupiah) for the last 1 (one) year, accompanied by the previous year's financial statements;
d. annual financial statements consisting of at least the financial position report and profit/loss report for MFIs with assets below IDR 1,000,000,000.00 (one billion rupiah) for the last 2 (two) years; e. list of MFI Loans/Financing for the last 2 (two) years according to Format 3 contained in the Appendix, which is an integral part of this Financial Services Authority Regulation; f. data of the Board of Directors, Board of Commissioners, DPS, shareholders, or members, as referred to in Article 6 paragraph (3) letters b and c; g. organizational structure and management as referred to in Article 6 paragraph (3) letter e; and h. MFI work systems and procedures as referred to in Article 6 paragraph (3) letter f. (2) Business license applications with non-cash capital contributions must meet the requirement of a maximum non-performing Loan ratio or non-performing Financing ratio of 10% (ten percent). (3) The non-performing Loan ratio or non-performing Financing ratio referred to in paragraph (2) is calculated based on the opening financial position report referred to in paragraph (1) letter b. (4) The capital amount in business license applications with non-cash capital contributions referred to in paragraph (1) must meet the capital amount provisions as referred to in Article 5 paragraph (2). (5) For applications referred to in paragraph (1), the Financial Services Authority conducts:
a. examination of document completeness; and b. analysis of compliance with laws and regulations in the field of MFIs.
(6) If necessary, the Financial Services Authority may conduct verification and interviews.
(7) The Financial Services Authority provides approval or rejection of the business license application within a maximum period of 30 (thirty) working days since the business license application referred to in paragraph (1) was received completely. (8) Rejection of the business license application is accompanied by reasons for rejection. (9) In the event that an MFI's business license application is rejected, the applicant may resubmit the MFI business license application as referred to in paragraph (1). (10) Provisions for business license applications with non-cash capital contributions as referred to in paragraph (1) are valid for a maximum of 2 (two) years from the date this Financial Services Authority Regulation is enacted. (11) The business license from the Financial Services Authority must be displayed at the MFI office.

Article 9
(1) MFIs that have obtained a business license from the Financial Services Authority must conduct business activities no later than 4 (four) months from the date the business license is established. (2) MFIs must submit reports on business activities as referred to in paragraph (1) to the Financial Services Authority no later than 20 (twenty) working days from the date business activities commence. (3) Reports on business activities as referred to in paragraph (2) must be submitted by the Board of Directors according to Format 4 contained in the Appendix, which is an integral part of this Financial Services Authority Regulation, accompanied by photocopies of proof of deposit management and/or Loan or Financing disbursement activities. (4) If, after the period referred to in paragraph (1), the MFI has not conducted business activities, the Financial Services Authority revokes the issued business license.

Article 10
(1) The name of the MFI must be clearly stated in the articles of association as referred to in Article 6 paragraph (3) letter a number 1 in accordance with applicable laws and regulations. (2) The name of the MFI as referred to in paragraph (1) must start with the legal form and contain the phrase:
a. "Microfinance Institution" and the name of the MFI for MFIs conducting business activities conventionally; or b. "Sharia Microfinance Institution" and the name of the MFI for MFIs conducting business activities based on Sharia Principles.

CHAPTER III
MANAGEMENT AND SUPERVISION
First Section
Board of Directors and Board of Commissioners
Article 11
The Board of Directors and Board of Commissioners must meet the following requirements:
a. are not included in the list of parties prohibited from becoming principal managers; b. are not recorded in the list of non-performing loans in the financial services sector;
c. have never been sentenced for committing criminal offenses in the field of financial services and/or economic business based on court decisions that have permanent legal force;
d. have never been sentenced for committing criminal offenses based on court decisions that have permanent legal force within the last 5 (five) years; e. have never been declared bankrupt or caused a business entity to be declared bankrupt based on court decisions that have permanent legal force within 5 (five) years; f. one of the Directors must have operational experience in the field of microfinance institutions or other financial services institutions for at least 1 (one) year; and g. one of the Directors must have operational experience in the field of Sharia microfinance institutions or other Sharia financial services institutions for at least 1 (one) year for MFIs conducting business activities based on Sharia Principles.

Article 12
(1) Directors are prohibited from holding concurrent positions as Directors in other MFIs.
(2) Directors may hold concurrent positions as Commissioners in at most 2 (two) other MFIs.
(3) Commissioners may hold concurrent positions as Commissioners in at most 3 (three) other MFIs.

Article 13
MFIs in the form of limited liability companies conducting deposit-taking activities must have at least:
a. 2 (two) members of the Board of Directors; and b. 2 (two) members of the Board of Commissioners.

Second Section
Sharia Supervisory Board
Article 14
(1) MFIs conducting business activities based on Sharia Principles must establish a DPS.
(2) The DPS as referred to in paragraph (1) is appointed in the general meeting of shareholders or members based on recommendations from the National Sharia Board of the Indonesian Ulema Council or DPS training certification from the National Sharia Board of the Indonesian Ulema Council. (3) The establishment of the DPS as referred to in paragraph (1) may be carried out by several MFIs. (4) The DPS as referred to in paragraph (1) carries out supervision and advisory tasks to the Board of Directors to ensure MFI business activities comply with Sharia Principles. (5) Supervision and advisory tasks as referred to in paragraph (4) are carried out in the form of:
a. ensuring and supervising the compliance of MFI operational activities with fatwas established by the National Sharia Board of the Indonesian Ulema Council; b. assessing Sharia aspects of operational guidelines and products issued by the MFI; and
c. reviewing new products and services for which no fatwa exists to request fatwas from the National Sharia Board of the Indonesian Ulema Council.
(6) Provisions regarding the requirements for Directors and Commissioners as referred to in Article 11, except for letters f and g, apply mutatis mutandis to the DPS.

CHAPTER IV
INSTITUTIONAL CHANGES
First Section
Changes in Shareholders, Directors, Commissioners, Sharia Supervisory Board, and Capital
Article 15
(1) The Board of Directors of MFIs in the form of limited liability companies must report changes:
a. shareholders; b. Directors;
c. Commissioners;
d. DPS; and/or e. capital, to the Financial Services Authority no later than 20 (twenty) working days after the date of approval, recording, or receipt of notification letters from the competent authority. (2) The Board of Directors of MFIs in the form of cooperative legal entities must report changes:
a. Directors; b. Commissioners; and/or
c. DPS,
to the Financial Services Authority no later than 20 (twenty) working days after the date of changes as recorded in the minutes of the members' meeting. (3) Reports as referred to in paragraph (1) are submitted according to Format 5, Format 6, and Format 7 contained in the Appendix, which is an integral part of this Financial Services Authority Regulation, accompanied by:
a. proof of changes as referred to in paragraph (1) that have been approved or recorded by the competent authority; and b. documents of the Board of Directors, Board of Commissioners, shareholders, and/or DPS as referred to

in Article 6 paragraph (3) letters b, c, and d.
(4) The report as referred to in paragraph (2) is submitted according to Format 6 contained in the Appendix which is an integral part of this Financial Services Authority Regulation, accompanied by:
a. minutes of the general meeting of shareholders or members; and b. documents of the Board of Directors, Board of Commissioners, and/or DPS as referred to in Article 6 paragraph (3) letter b and letter d. (5) To follow up on the report of changes in the Board of Directors as referred to in paragraph (1) or paragraph (2), the Financial Services Authority may conduct verification and interviews to ensure compliance with the requirements as referred to in Article 11.

Second Section
Name Change
Article 16
(1) The Board of Directors is required to report changes in the name of the LKM to the Financial Services Authority no later than 20 (twenty) working days after obtaining the name change approval letter from the competent authority or proof of name change reporting to the competent authority, according to Format 8 contained in the Appendix which is an integral part of this Financial Services Authority Regulation, accompanied by documents:
a. minutes of the general meeting of shareholders or members regarding the name change of the LKM; b. proof of amendment to the articles of association regarding the name change that has been approved by the competent authority for LKM in the form of a limited liability company or proof of reporting to the competent authority for LKM in the form of a cooperative legal entity; and
c. proof of announcement of the name change through a bulletin board at the LKM office that is easily accessible to the public or a local daily newspaper.
(2) Based on the report as referred to in paragraph (1), the Financial Services Authority records the name change of the LKM within a period of no longer than 20 (twenty) working days calculated from the date of receipt of the complete report.

Third Section
Office Address Relocation
Article 17
(1) The plan to relocate the office address is announced in advance to the public through a bulletin board at the LKM office in a place easily accessible to the public or a local daily newspaper, no later than 20 (twenty) working days before the office address relocation. (2) The Board of Directors is required to report the office address relocation to the Financial Services Authority no later than 20 (twenty) working days after the date of implementation of the change according to Format 9 contained in the Appendix which is an integral part of this Financial Services Authority Regulation. (3) The report as referred to in paragraph (2) is accompanied by proof:
a. announcement to the public regarding the office address relocation through a bulletin board at the LKM office in a place easily accessible to the public or a local daily newspaper; and b. possession of the new office.

(4) LKM is prohibited from relocating its office address as referred to in paragraph (2) outside the business coverage area.

CHAPTER V
MERGER AND CONSOLIDATION
Article 18
(1) LKM may carry out a merger with one or more LKM by maintaining the establishment of one LKM and dissolving the other LKM(s) without prior liquidation. (2) LKM may carry out a consolidation with one or more LKM by establishing a new LKM and dissolving the LKM(s) carrying out the consolidation. (3) Merger or consolidation is carried out by LKM of the same legal entity form. (4) LKM is prohibited from carrying out a merger or consolidation with another LKM located in a different district/city area. (5) Merger or consolidation must consider capital provisions as referred to in Article 5. (6) The merger or consolidation process of LKM must obtain prior approval from the Financial Services Authority.

Article 19
(1) To obtain approval for merger or consolidation as referred to in Article 18 paragraph (6), the Board of Directors of the LKM to be acquired in the merger or the Board of Directors of one of the LKM to be consolidated must submit an application to the Financial Services Authority according to Format 10 or Format 11 contained in the Appendix which is an integral part of this Financial Services Authority Regulation.

(2) The application as referred to in paragraph (1) must be accompanied by a draft merger or consolidation plan containing at least:
a. minutes of the general meeting of shareholders or members carrying out the merger or consolidation; b. draft amendment to the articles of association of the LKM receiving the merger if any or draft articles of association of the LKM resulting from the consolidation;
c. plan for the settlement of rights and obligations of the LKM to be merged or consolidated without reducing the rights of Depositors and borrowers or Financing recipients; and
d. projection of the financial position report and income statement of the LKM to be acquired in the merger or resulting from the consolidation for 2 (two) years. (3) The Financial Services Authority provides approval or rejection of the application as referred to in paragraph (1) within a period of no longer than 20 (twenty) working days from the date the application is received completely. (4) To provide approval for the application as referred to in paragraph (1), the Financial Services Authority conducts:
a. examination of document completeness; and b. analysis of compliance with regulations in the field of LKM.
(5) Rights and obligations arising after carrying out a merger or consolidation become the responsibility of the LKM to be acquired in the merger or resulting from the consolidation.

Article 20
(1) The LKM receiving the merger is required to report the results of the merger implementation to the Financial Services Authority according to Format 12 contained in the Appendix which is an integral part of this Financial Services Authority Regulation and accompanied by documents:
a. photocopy of the amendment to the articles of association of the LKM receiving the merger that has been approved or agreed upon by the competent authority or notified to the competent authority; b. organizational structure and management of the LKM resulting from the merger, data of the Board of Directors, Board of Commissioners, and DPS as referred to in Article 6 paragraph (3) letter b and data of shareholders or members as referred to in Article 6 paragraph (3) letter c of the LKM receiving the merger;
c. financial position report and income statement of the LKM receiving the merger; and
d. complete address of the LKM receiving the merger.
(2) The LKM resulting from the consolidation is required to report the results of the consolidation implementation to the Financial Services Authority according to Format 13 contained in the Appendix which is an integral part of this Financial Services Authority Regulation and accompanied by documents:
a. photocopy of the articles of association of the LKM resulting from the consolidation that has been approved or agreed upon by the competent authority; b. organizational structure and management of the LKM resulting from the consolidation, data of the Board of Directors, Board of Commissioners, and DPS as referred to in Article 6 paragraph (3) letter b and data of shareholders or members as referred to in Article 6 paragraph (3) letter c of the LKM resulting from the consolidation;
c. financial position report and income statement of the LKM receiving the consolidation; and
d. complete address of the LKM resulting from the consolidation.
(3) The reports as referred to in paragraph (1) and paragraph (2) must be submitted no later than 20 (twenty) working days after the date of receipt of the approval, agreement, or notification letter of the articles of association change from the competent authority. (4) Based on the report as referred to in paragraph (1), the Financial Services Authority revokes the business license of the LKM merging into another. (5) Based on the report as referred to in paragraph (2), the Financial Services Authority revokes the business license of the LKM carrying out the consolidation and issues a business license for the LKM resulting from the consolidation.

Article 21
(1) The headquarters and branches of the LKM merging into another may be used as branches of the LKM resulting from the merger.
(2) One of the headquarters of the LKM consolidating may be used as the headquarters of the LKM resulting from the consolidation.
(3) The headquarters and branches of the LKM consolidating may be used as branches of the LKM resulting from the consolidation.

Article 22
(1) LKM conducting business activities based on Sharia Principles are prohibited from carrying out a merger or consolidation with LKM other than those conducting business activities based on Sharia Principles. (2) Provisions regarding merger or consolidation as referred to in Article 18, Article 19, Article 20, and Article 21 apply mutatis mutandis to LKM conducting business activities based on Sharia Principles.

Article 23
Merger and consolidation of LKM are carried out in accordance with regulations.

CHAPTER VI
BRANCH OFFICES
Article 24
(1) LKM with a business coverage area in a district/city may open branch offices within its business coverage area by meeting the requirement of not experiencing losses in the annual financial position report as of December 31 of the previous year. (2) The opening of branch offices as referred to in paragraph (1) must be reported to the Financial Services Authority no later than 20 (twenty) working days from the date of implementation of the branch office opening according to Format 14 contained in the Appendix which is an integral part of this Financial Services Authority Regulation. (3) The branch office opening report as referred to in paragraph (2) is accompanied by:
a. photocopy of proof of implementation of Savings management and/or Loan or Financing disbursement activities; b. proof of possession of the branch office; and
c. organizational structure and personnel of the branch office.

Article 25
(1) The closure of LKM branch offices must be reported to the Financial Services Authority.
(2) The branch office closure report as referred to in paragraph (1) is submitted according to Format 15 contained in the Appendix which is an integral part of this Financial Services Authority Regulation, no later than 20 (twenty) working days after the branch office closure is implemented, accompanied by:
a. reasons for closure; and

b. proof of transfer or settlement of rights and obligations of Depositors, borrowers or Financing recipients and/or other parties.

CHAPTER VII
CHANGE OF BUSINESS COVERAGE AREA
Article 26
(1) LKM whose domicile and business coverage area change as a result of area expansion are required to submit a report to the Financial Services Authority regarding the area expansion accompanied by information on Loans/Financing and/or Savings within a period of no longer than 20 (twenty) working days from the date the area expansion is established according to Format 16 contained in the Appendix which is an integral part of this Financial Services Authority Regulation. (2) In the event of area expansion:
a. Loans or Financing already disbursed by the LKM outside its business area may continue until the Loan or Financing repayment period ends; and b. Savings already received by the LKM from Depositors outside its business area may continue until the Savings are closed.

Article 27
(1) LKM may expand its business coverage area.
(2) LKM carrying out business coverage area expansion as referred to in paragraph (1) is required to meet the capital amount requirements as referred to in Article 5 paragraph (2).

(3) LKM to carry out business coverage area expansion as referred to in paragraph (1) is required to submit a report on the business coverage area expansion plan to the Financial Services Authority no later than 20 (twenty) working days from the date of the general meeting of shareholders or members. (4) The report as referred to in paragraph (3) is submitted according to Format 17 contained in the Appendix which is an integral part of this Financial Services Authority Regulation and accompanied by minutes of the general meeting of shareholders or members regarding the business coverage area expansion of the LKM. (5) Based on the business coverage area expansion plan report as referred to in paragraph (3), the Financial Services Authority adjusts the business license of the LKM within a period of no longer than 20 (twenty) working days. (6) To carry out the business license adjustment as referred to in paragraph (5), the Financial Services Authority conducts:
a. examination of document completeness; and b. analysis of compliance with capital amount requirements as referred to in paragraph (2).

CHAPTER VII
REVOCATION OF BUSINESS LICENSE AND DISSOLUTION OF LKM
Article 28
(1) Revocation of the LKM business license is carried out by the Financial Services Authority.
(2) In the event that the LKM:
a. is subject to the sanction of business license revocation; b. dissolves as a result of carrying out a merger or consolidation as referred to in Article 18 to Article 23;

c. fails to carry out rehabilitation efforts to overcome liquidity and solvency difficulties as referred to in the Financial Services Authority Regulation regarding the conduct of LKM business; or
d. requests revocation of the business license based on a decision of the general meeting of shareholders or members, the Financial Services Authority carries out the revocation of the business license.

Article 29
(1) In the event that the LKM rehabilitation efforts carried out fail to overcome liquidity and solvency difficulties as referred to in Article 28 paragraph (2) letter c, the Financial Services Authority:
a. revokes the LKM business license; and b. orders the Board of Directors to immediately hold a general meeting of shareholders or members to dissolve the LKM legal entity and form a liquidation team in accordance with regulations, and announce the end or dissolution of the legal entity. (2) The dissolution of the LKM legal entity, formation of the liquidation team, and settlement of rights and obligations are carried out in accordance with regulations. (3) Shareholders or members of the LKM are responsible for all unresolved LKM obligations that may arise in the future from the date the business license revocation is issued.

Article 30
(1) Revocation of the business license upon request of the LKM as referred to in Article 28 paragraph (2) letter d may be carried out by the LKM by meeting the requirements:

a. not undergoing rehabilitation as referred to in the Financial Services Authority Regulation regarding the conduct of LKM business; and b. has settled all obligations. (2) The application for revocation of the business license as referred to in paragraph (1) is submitted by the Board of Directors to the Financial Services Authority by attaching:
a. minutes of the general meeting of shareholders or members regarding approval of the plan for revocation of the business license upon request of shareholders or members of the LKM; b. proof of tax settlement and other obligations to the state;
c. proof of settlement of all LKM obligations to customers, creditors, employees, and other parties;
d. final financial position report of the LKM; and e. LKM business license.
(3) The Financial Services Authority may request the LKM to appoint a public accountant to prepare the final financial position report including conducting verification to ensure the settlement of all LKM obligations. (4) The Financial Services Authority examines the documents submitted in the application for revocation of the business license as referred to in paragraph (2). (5) Based on the examination results of the application as referred to in paragraph (2), the Financial Services Authority revokes the business license of the relevant LKM and orders the Board of Directors to:
a. announce the revocation of the LKM business license and the plan for settlement of LKM obligations on a bulletin board at the LKM office that is easily accessible to the public or a local daily newspaper no later than 10 (ten) working days after the date of the LKM business license revocation letter; and

b. immediately hold a general meeting of shareholders or members to dissolve the LKM legal entity, form a liquidation team in accordance with regulations, and announce the end or dissolution of the legal entity. (6) The dissolution of the LKM legal entity, formation of the liquidation team, and settlement of rights and obligations are carried out in accordance with regulations. (7) Shareholders or members of the LKM are responsible for all unresolved LKM obligations that may arise in the future from the date the business license revocation is issued.

CHAPTER VIII
LKM TRANSFORMATION
Article 31
(1) LKM is required to transform into a rural bank or Sharia rural financing bank if:
a. it conducts business activities exceeding 1 (one) district/city area where the LKM is domiciled; or b. the LKM has:

1. equity of at least 5 (five) times the minimum paid-up capital requirement for rural banks or Sharia rural financing banks in accordance with regulations;
2. the amount of third-party funds in the form of Savings collected in the last 1 (one) year of at least 25 (twenty-five) times the minimum paid-up capital requirement for rural banks or Sharia rural financing banks in accordance with regulations; and
3. the ratio of Non-Performing Loans or the ratio of Non-Performing Financing of no more than 1% (one percent) in the last 1 (one) year.
   (2) LKM as referred to in paragraph (1) is required to submit an application for a business license as a rural bank or Sharia rural financing bank within a period of no longer than 3 (three) years from the date of notification from the Financial Services Authority. (3) If before the end of the period as referred to in paragraph (2) the LKM no longer meets the criteria as referred to in paragraph (1), the LKM is not required to transform into a rural bank or Sharia rural financing bank. (4) LKM as referred to in paragraph (2) is prohibited from disbursing Loans or Financing outside its business coverage area. (5) The procedure for implementing the transformation of LKM into a rural bank or Sharia rural financing bank is carried out in accordance with regulations regarding rural banks or Sharia rural financing banks. (6) In the event that the application as referred to in paragraph (2) is rejected, the LKM may still conduct its business activities in accordance with the LKM business area as regulated in the Government Regulation regarding the business coverage area of LKM. (7) LKM as referred to in paragraph (6) is prohibited from conducting its business activities outside its business coverage area.

CHAPTER IX
COMPLIANCE ENFORCEMENT
First Section
Notification
Article 32
(1) LKM that do not meet the provisions as referred to in Article 2 paragraph (2) and paragraph (4), Article 3, Article 4, Article 5 paragraph (3), Article 7 paragraph (6), Article 8 paragraph (11), Article 9 paragraph (2) and paragraph (3), Article 12 paragraph (1), Article 13, Article 14 paragraph (1), Article 15 paragraph (1) and paragraph (2), Article 16 paragraph (1), Article 17 paragraph (2) and paragraph (4), Article 18 paragraph (4) and paragraph (6), Article 20 paragraph (1), paragraph (2) and paragraph (3), Article 22 paragraph (1), Article 24 paragraph (2), Article 25 paragraph (1), Article 26 paragraph (1), and Article 27 paragraph (2) and paragraph (3), are given a notification letter. (2) LKM is required to fulfill the provisions as referred to in paragraph (1) no later than 40 (forty) working days from the date of the notification letter. (3) If by the end of the period of the notification letter as referred to in paragraph (2), the LKM does not meet the provisions as referred to in Article 2 paragraph (2) and paragraph (4), Article 3, Article 4, Article 5 paragraph (3), Article 7 paragraph (6), Article 8 paragraph (11), Article 9 paragraph (2) and paragraph (3), Article 12 paragraph (1), Article 13, Article 14 paragraph (1), Article 15 paragraph (1) and paragraph (2), Article 16 paragraph (1), Article 17 paragraph (2) and paragraph (4), Article 18 paragraph (4) and paragraph (6), Article 20 paragraph (1), paragraph (2) and paragraph (3), Article 22 paragraph (1), Article 24 paragraph (2), Article 25 paragraph (1), Article 26 paragraph (1), and Article 27 paragraph (2) and paragraph (3), the LKM is subject to administrative sanctions.

Second Section
Administrative Sanctions
Article 33
Administrative sanctions as referred to in Article 32 paragraph (3) consist of:
a. written warning; b. suspension of business activities; or
c. revocation of business license.

Article 34
(1) If by the end of the period of the notification letter as referred to in Article 32 paragraph (2), the LKM still does not meet the provisions as referred to in Article 2 paragraph (2) and paragraph (4), Article 3, Article 4, Article 14 paragraph (1), Article 17 paragraph (4), Article 18 paragraph (4) and paragraph (6), Article 22 paragraph (1), and/or Article 27 paragraph (2), the LKM is subject to administrative sanctions in stages consisting of:
a. written warning; b. suspension of business activities; or
c. revocation of business license.
(2) Administrative sanctions in the form of written warnings as referred to in paragraph (1) letter a are given for a maximum of 3 (three) consecutive times with a validity period of each of no longer than 30 (thirty) working days. (3) If before the end of the validity period of the administrative sanction in the form of a written warning as referred to in paragraph (2), the LKM has met the provisions as referred to in paragraph (1), the Financial Services Authority revokes the written warning sanction. (4) If the validity period of the administrative sanction in the form of a written warning as referred to in paragraph (2) ends and the LKM still does not meet the provisions as referred to in paragraph (1), the LKM is subject to administrative sanctions in the form of suspension of business activities. (5) Administrative sanctions in the form of suspension of business activities as referred to in paragraph (4) are given for a maximum of 1 (one) year. (6) If before the end of the validity period of the administrative sanction in the form of suspension of business activities as referred to in paragraph (5), the LKM has met the provisions as referred to in paragraph (1), the Financial Services Authority revokes the administrative sanction in the form of suspension of business activities. (7) If the validity period of the administrative sanction in the form of suspension of business activities as referred to in paragraph (5) ends and the LKM does not meet the provisions as referred to in paragraph (1), the Financial Services Authority revokes the LKM business license and orders the Board of Directors to:
a. announce the revocation of the LKM business license and the plan for settlement of LKM obligations on a bulletin board at the relevant LKM office that is easily accessible to the public or a local daily newspaper no later than 10 (ten) working days after the date of the LKM business license revocation letter; and b. immediately hold a general meeting of shareholders or members to dissolve the LKM legal entity, form a liquidation team in accordance with regulations, and announce the end or dissolution of the legal entity.

Article 35
(1) LKM that do not meet the provisions as referred to in Article 9 paragraph (1) are subject to administrative sanctions in the form of revocation of business license.

(2) The Financial Services Authority revokes the business license of the relevant MFI as referred to in paragraph (1) and orders the Board of Directors to:
a. announce the revocation of the MFI's business license and the plan for settling the MFI's obligations on a notice board at the relevant MFI's office that is easily accessible to the public, or in a local daily newspaper, no later than 10 (ten) working days after the date of the MFI business license revocation letter; and b. immediately hold a General Meeting of Shareholders or a General Meeting of Members to dissolve the MFI's legal entity, form a liquidation team in accordance with applicable laws and regulations, and announce the termination or dissolution of the legal entity.

Article 36
If by the end of the time limit of the notification letter as referred to in Article 32 paragraph (2), the MFI still does not meet the provisions as referred to in Article 5 paragraph (3), Article 7 paragraph (6), Article 8 paragraph (11), Article 9 paragraph (2), paragraph (3), Article 15 paragraph (1), paragraph (2), Article 16 paragraph (1), Article 17 paragraph (2), Article 20 paragraph (1), paragraph (2), paragraph (3), Article 24 paragraph (2), Article 25 paragraph (1), Article 26 paragraph (1), and/or Article 27 paragraph (3), the MFI shall be subject to administrative sanctions in the form of a written warning.

Article 37
(1) If by the end of the time limit of the notification letter as referred to in Article 32 paragraph (2), the MFI still does not meet the provisions as referred to in Article 12 paragraph (1) and Article 13, the MFI shall be subject to administrative sanctions in the form of a written warning. (2) Administrative sanctions in the form of a written warning as referred to in paragraph (1) are given at most 3 (three) times consecutively with a validity period of each at most 30 (thirty) working days. (3) If before the end of the validity period of the administrative sanction in the form of a written warning as referred to in paragraph (2), the MFI has met the provisions as referred to in paragraph (1), the Financial Services Authority revokes the written warning sanction. (4) If the validity period of the written warning as referred to in paragraph (2) expires and the MFI still does not meet the provisions as referred to in paragraph (1), the MFI is subject to additional measures in the form of suspension of deposit-gathering business activities. (5) In the event that the MFI has met the provisions as referred to in paragraph (1), the Financial Services Authority revokes the suspension of deposit-gathering business activities.

Article 38
(1) MFIs that do not meet the provisions in Article 31 paragraph (4) and/or paragraph (7) are subject to administrative sanctions in the form of a written warning. (2) Administrative sanctions in the form of a written warning as referred to in paragraph (1) are given at most 3 (three) times consecutively with a validity period of each at most 30 (thirty) working days. (3) If before the end of the validity period of the administrative sanction in the form of a written warning as referred to in paragraph (2), the MFI has met the provisions as referred to in paragraph (1), the Financial Services Authority revokes the written warning sanction. (4) If the validity period of the written warning as referred to in paragraph (2) expires and the MFI still does not meet the provisions as referred to in paragraph (1), the MFI is subject to additional measures in the form of suspension of deposit-gathering business activities. (5) If the MFI has met the provisions as referred to in paragraph (1), the Financial Services Authority revokes the suspension of deposit-gathering business activities.

CHAPTER XI
TRANSITIONAL PROVISIONS

Article 39
MFIs that have obtained a business license with non-cash capital deposits based on Financial Services Authority Regulation Number 61/POJK.05/2015 concerning Amendments to Financial Services Authority Regulation Number 12/POJK.05/2014 concerning Business Licensing and Institutional Framework of Microfinance Institutions, must meet the provisions as referred to in Article 2 paragraph (2), paragraph (3), and paragraph (4) and Article 3 no later than 5 (five) years from the date this Financial Services Authority Regulation takes effect.

Article 40
For MFIs that have obtained a business license before this Financial Services Authority Regulation was enacted, the administrative sanctions as referred to in Article 37 for violations of Article 13 shall take effect 5 (five) years from the date this Financial Services Authority Regulation was enacted.

Article 41
Business license applications received by the Financial Services Authority before this Financial Services Authority Regulation was enacted shall be processed in accordance with Financial Services Authority Regulation Number 12/POJK.05/2014 concerning Business Licensing and Institutional Framework of Microfinance Institutions as amended by Financial Services Authority Regulation Number 61/POJK.05/2015 concerning Amendments to Financial Services Authority Regulation Number 12/POJK.05/2014 concerning Business Licensing and Institutional Framework of Microfinance Institutions.

Article 42
Conditional licenses obtained before this Financial Services Authority Regulation was enacted remain valid and their follow-up actions are in accordance with Financial Services Authority Regulation Number 61/POJK.05/2015 concerning Amendments to Financial Services Authority Regulation Number 12/POJK.05/2014 concerning Business Licensing and Institutional Framework of Microfinance Institutions.

CHAPTER XII
CLOSING PROVISIONS

Article 43
At the time this Financial Services Authority Regulation takes effect:
a. Financial Services Authority Regulation Number 12/POJK.05/2014 concerning Business Licensing and Institutional Framework of Microfinance Institutions (State Gazette of the Republic of Indonesia Year 2014 Number 342, Supplement to the State Gazette of the Republic of Indonesia Number 5621) as amended by Financial Services Authority Regulation Number 61/POJK.05/2015 concerning Amendments to Financial Services Authority Regulation Number 12/POJK.05/2014 concerning Business Licensing and Institutional Framework of Microfinance Institutions (State Gazette of the Republic of Indonesia Year 2015 Number 412, Supplement to the State Gazette of the Republic of Indonesia Number 5830) is revoked and declared invalid; and b. all implementation provisions of Financial Services Authority Regulation Number 12/POJK.05/2014 concerning Business Licensing and Institutional Framework of Microfinance Institutions (State Gazette of the Republic of Indonesia Year 2014 Number 342, Supplement to the State Gazette of the Republic of Indonesia Number 5621) as amended by Financial Services Authority Regulation Number 61/POJK.05/2015 concerning Amendments to Financial Services Authority Regulation Number 12/POJK.05/2014 concerning Business Licensing and Institutional Framework of Microfinance Institutions (State Gazette of the Republic of Indonesia Year 2015 Number 412, Supplement to the State Gazette of the Republic of Indonesia Number 5830) remain valid as long as they do not conflict with the provisions in this Financial Services Authority Regulation.

Article 44
This Financial Services Authority Regulation takes effect on the date of its enactment.

This copy is consistent with the original
Director of Law 1
Legal Department signed
Mufli Asmawidjaja

To ensure that everyone knows it, ordering the enactment of this Financial Services Authority Regulation by placing it in the State Gazette of the Republic of Indonesia.

Established in Jakarta on 22 June 2021
CHAIRMAN OF THE COMMISSIONERS BOARD
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
WIMBOH SANTOSO

Enacted in Jakarta on 1 July 2021
MINISTER OF LAW AND HUMAN RIGHTS
REPUBLIC OF INDONESIA, signed
YASONNA H. LAOLY
STATE GAZETTE OF THE REPUBLIC OF INDONESIA YEAR 2021 NUMBER 145

EXPLANATION
OF
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 10 /POJK.05/2021
CONCERNING
BUSINESS LICENSING AND INSTITUTIONAL FRAMEWORK OF MICROFINANCE INSTITUTIONS

I. GENERAL
Law Number 1 of 2013 concerning Microfinance Institutions mandates that MFIs must obtain a business license from the Financial Services Authority. In this regard, the Financial Services Authority has established a Financial Services Authority Regulation regarding business licensing and institutional framework, namely Financial Services Authority Regulation Number 12/POJK.05/2014 concerning Business Licensing and Institutional Framework of Microfinance Institutions as amended by Financial Services Authority Regulation Number 61/POJK.05/2015 concerning Amendments to Financial Services Authority Regulation Number 12/POJK.05/2014 concerning Business Licensing and Institutional Framework of Microfinance Institutions.

In its development, it is necessary to readjust the Financial Services Authority Regulation regarding MFI business licensing and institutional framework to better encourage the development of healthy and accountable MFIs, and to accommodate dynamics in the field.

This Financial Services Authority Regulation contains several main substances that have undergone changes or adjustments, including:
a. adjustment of minimum capital at the time of applying for a business license; b. addition and adjustment of business license application documents;
c. validity period of non-cash business licenses;
d. fulfillment of Non-Performing Loan or Non-Performing Finance limits for business license applications with non-cash capital deposits; e. provisions on business license revocation; f. compliance enforcement provisions; and g. adjustment of administrative sanctions.

In this regard, the Financial Services Authority establishes the Financial Services Authority Regulation concerning Business Licensing and Institutional Framework of Microfinance Institutions.

II. ARTICLE BY ARTICLE

Article 1
Sufficiently clear.

Article 2
Paragraph (1)
Letter a
What is meant by "cooperative" is a service cooperative.
Letter b
Sufficiently clear.
Paragraph (2)
Sufficiently clear.
Paragraph (3)
Sufficiently clear.
Paragraph (4)
Sufficiently clear.

Article 3
Ownership of the MFI by insiders in this regulation is done while still paying attention to the provisions as referred to in Article 2.

Article 4
Sufficiently clear.

Article 5
Paragraph (1)
Sufficiently clear.
Paragraph (2)
Sufficiently clear.
Paragraph (3)
What is meant by "working capital" is capital used by the MFI for the distribution of Loans or Financing or for placing funds to support MFI operations. Paragraph (4) Sufficiently clear. Paragraph (5) Sufficiently clear.

Article 6
Paragraph (1)
Sufficiently clear.
Paragraph (2)
Sufficiently clear.
Paragraph (3)
Letter a
Sufficiently clear.
Letter b
Number 1
Sufficiently clear.
Number 2
Sufficiently clear.
Number 3
Letter a)
What is meant by "principal management party" is the principal management party as regulated in the Financial Services Authority Regulation regarding re-evaluation for principal parties of financial service institutions. Letter b) Sufficiently clear. Letter c) Sufficiently clear. Letter d) Sufficiently clear. Letter e) Sufficiently clear. Letter f) Sufficiently clear. Letter g) Sufficiently clear. Letter h) Sufficiently clear. Number 4 Sufficiently clear. Number 5 What is meant by "operational experience" is experience in the fields of funding, credit, marketing, collection, and/or accounting/bookkeeping. Number 6 Sufficiently clear. Letter c Number 1 Sufficiently clear. Number 2 Letter a) Sufficiently clear. Letter b) What is meant by "latest financial report or latest financial bookkeeping" is the period of financial or financial bookkeeping reports at most 4 (four) months before the date of applying for the MFI business license. Letter c) Sufficiently clear. Letter d) Sufficiently clear. Number 3 Sufficiently clear. Letter d Sufficiently clear. Letter e Sufficiently clear. Letter f Work systems and procedures can be supplemented with example forms used, for example, deposit opening forms and deposit withdrawal forms. Number 1 Sufficiently clear. Number 2 What is meant by "business activities" is business activities as stated in the MFI's articles of association. Number 3 Sufficiently clear. Number 4 Sufficiently clear. Letter g Sufficiently clear. Letter h A letter of statement from the Board of Directors among others states that fixed-term deposits still valid in the name of one of the Directors are intended to meet the capital establishment requirements for the MFI business license application and its withdrawal is carried out after obtaining approval from the Board of Commissioners. Letter i Sufficiently clear. Letter j Sufficiently clear.

Article 7
Paragraph (1)
Sufficiently clear.
Paragraph (2)
Sufficiently clear.
Paragraph (3)
What is meant by "verification and interview" is an action taken by the Financial Services Authority to ensure among other things the suitability of MFI facilities and infrastructure and the capability of the MFI's Board of Directors. Paragraph (4) Sufficiently clear. Paragraph (5) Sufficiently clear. Paragraph (6) What is meant by "stated in the MFI office" is placed on the wall of the MFI office space that serves as a service location for customers.

Article 8
Paragraph (1)
What is meant by "MFI applying for a license with non-cash capital deposits" is an MFI that has operated before the enactment of the Law concerning Microfinance Institutions. Letter a Sufficiently clear. Letter b The financial position report or balance sheet is part of an MFI's financial report generated during an accounting period showing the MFI's financial position at the end of that period. Letter c What is meant by "previous year's financial report" can be an unaudited annual financial report. Letter d Sufficiently clear. Letter e Sufficiently clear. Letter f Sufficiently clear. Letter g Sufficiently clear. Letter h Sufficiently clear. Paragraph (2) The ratio of Problematic Loans or commonly used Non-Performing Loan or the ratio of Problematic Financing or commonly used Non-Performing Finance is calculated by comparing Loans or Financing that have doubtful and bad quality with the total Loans or Financing provided to the community, as regulated in the Financial Services Authority Regulation concerning the conduct of microfinance institution businesses. Paragraph (3) Sufficiently clear. Paragraph (4) The amount of capital is calculated based on equity in the opening financial position report which has taken into account the provision for write-off of Loans or Financing in accordance with the ratio of Problematic Loans or the ratio of Problematic Financing. Paragraph (5) Sufficiently clear. Paragraph (6) Sufficiently clear. Paragraph (7) Sufficiently clear. Paragraph (8) Sufficiently clear. Paragraph (9) Sufficiently clear. Paragraph (10) Sufficiently clear. Paragraph (11) Sufficiently clear.

Article 9
Sufficiently clear.

Article 10
Paragraph (1)
What is meant by laws and regulations provisions are:
a. laws and regulations provisions in the cooperative field for MFIs in the form of cooperative legal entities; and b. laws and regulations provisions in the limited liability company field for MFIs in the form of limited liability company legal entities. Paragraph (2) Example: PT Microfinance Institution Bakti Makmur, Sugih Waras Islamic Microfinance Institution Cooperative. MFIs can also state the name of the originating institution, for example, Village Economic Unit Savings and Loan Business becomes PT Microfinance Institution Village Economic Unit Savings and Loan Business Sentosa, Islamic Microfinance Institution Cooperative Village Economic Unit Savings and Loan Business Sentosa.

Article 11
Letter a
What is meant by "principal management party" is the principal party as referred to in the Financial Services Authority Regulation regarding the re-evaluation of principal parties of financial service institutions. Example:
Mr. A, based on the process conducted by the Financial Services Authority in accordance with the Financial Services Authority Regulation regarding the re-evaluation of principal parties of financial service institutions, is declared to be included in the list of parties prohibited from becoming principal management parties at a Rural Bank. Letter b Sufficiently clear. Letter c Sufficiently clear. Letter d Sufficiently clear. Letter e Sufficiently clear. Letter f Sufficiently clear. Letter g Sufficiently clear.

Article 12
Sufficiently clear.

Article 13
Sufficiently clear.

Article 14
Sufficiently clear.

Article 15
Sufficiently clear.

Article 16
Sufficiently clear.

Article 17
Paragraph (1)
What is meant by "office" is the head office and branch offices.
Paragraph (2)
Sufficiently clear.
Paragraph (3)
Sufficiently clear.
Paragraph (4)
Sufficiently clear.

Article 18
Sufficiently clear.

Article 19
Sufficiently clear.

Article 20
Paragraph (1)
Letter a
Sufficiently clear.
Letter b
Sufficiently clear.
Letter c
The financial position report or balance sheet is part of an MFI's financial report generated during an accounting period showing the MFI's financial position at the end of that period. Meanwhile, the income statement is part of an MFI's financial report generated during an accounting period showing the MFI's revenue and expense elements. Letter d Sufficiently clear. Paragraph (2) Sufficiently clear. Paragraph (3) Sufficiently clear. Paragraph (4) Sufficiently clear. Paragraph (5) Sufficiently clear.

Article 21
Sufficiently clear.

Article 22
Sufficiently clear.

Article 23
What is meant by "laws and regulations provisions" includes among others laws and regulations regarding limited liability companies and cooperatives in relation to the merger and consolidation process.

Article 24
Sufficiently clear.

Article 25
Sufficiently clear.

Article 26
Sufficiently clear.

Article 27
Paragraph (1)
Sufficiently clear.
Paragraph (2)
What is meant by "capital" is:
a. the sum of paid-up capital, additional paid-up capital, reserves, grants, and retained earnings or losses for MFIs in the form of limited liability company legal entities; or b. the sum of basic deposits, mandatory deposits, reserves, grants, and surplus of results of operations for MFIs in the form of cooperative legal entities. What is meant by "reserve funds" is a component of MFI cooperative capital set aside from the surplus of results of operations and cannot be distributed to members. Paragraph (3) Sufficiently clear. Paragraph (4) Sufficiently clear. Paragraph (5) Sufficiently clear. Paragraph (6) Sufficiently clear.

Article 28
Sufficiently clear.

Article 29
Paragraph (1)
What is meant by "liquidation team" for cooperative legal entities is the settlement team.
Paragraph (2)
Sufficiently clear.
Paragraph (3)
Sufficiently clear.

Article 30
Paragraph (1)
Sufficiently clear.
Paragraph (2)
Letter a
Sufficiently clear.
Letter b
Sufficiently clear.
Letter c
What is meant by "other parties" includes among other things announcement service providers, office equipment, and building rentals.
Letter d
Sufficiently clear.
Letter e
Sufficiently clear.
Paragraph (3)
Sufficiently clear.
Paragraph (4)
Sufficiently clear.
Paragraph (5)
Sufficiently clear.
Paragraph (6)
Sufficiently clear.
Paragraph (7)
Sufficiently clear.

Article 31
Paragraph (1)
Sufficiently Clear.
Paragraph (2)
What is meant by "notification from the Financial Services Authority" is a notification letter submitted by the Financial Services Authority in the event that the MFI has met the criteria as referred to in paragraph (1). Paragraph (3) Sufficiently clear. Paragraph (4) Sufficiently clear. Paragraph (5) Sufficiently clear. Paragraph (6) Sufficiently clear. Paragraph (7) Sufficiently clear.

Article 32
Sufficiently clear.

Article 33
Sufficiently clear.

Article 34
Sufficiently clear.

Article 35
Sufficiently clear.

Article 36
Sufficiently clear.

Article 37
Sufficiently clear.

Article 38
Sufficiently clear.

Article 39
Sufficiently clear.

Article 40
Sufficiently clear.

Article 41
Sufficiently clear.

Article 42
Sufficiently clear.

Article 43
Sufficiently clear.

Article 44
Sufficiently clear.

SUPPLEMENT TO THE STATE GAZETTE OF THE REPUBLIC OF INDONESIA NUMBER 6691

APPENDIX
FINANCIAL SERVICES AUTHORITY REGULATION
REPUBLIC OF INDONESIA
NUMBER 10 /POJK.05/2021
CONCERNING
BUSINESS LICENSING AND INSTITUTIONAL FRAMEWORK OF MICROFINANCE INSTITUTIONS

EXAMPLE FORMAT 1 APPLICATION FOR BUSINESS LICENSE OF MICROFINANCE INSTITUTION WITH CASH CAPITAL DEPOSITS

To the
Executive Head of IKNB Supervision, Financial Services Authority through the MFI Directorate/OJK Office/Regional Office*) ………… Jln ……………….. ………………..

Referring to Financial Services Authority Regulation Number /POJK.05/2021 concerning Business Licensing and Institutional Framework of Microfinance Institutions, we hereby submit an application to obtain a business license as a Microfinance Institution (MFI):
Name : PT/Cooperative*) MFI/ISFM*) .....
Address : .....
District/City .....
Province .....
Phone/fax No. : .....
Email : .....

To complete the aforementioned application, we hereby submit the following documents:

1. Deed of establishment of PT/Cooperative*) MFI/ISFM*) .....
   including articles of association and any amendments (if any) that have been approved/consented by the competent authority or notified to the competent authority.
2. Data of the Board of Directors, Board of Commissioners, and DPS, accompanied by:
   a. photocopy of identification cards (ID Card/KTP); b. curriculum vitae;
   c. stamped letter of statement from the Board of Directors, Board of Commissioners, and DPS stating:

1. not included in the list of parties prohibited from becoming principal management parties;
2. not recorded in the list of bad credits in the financial service sector;
3. never sentenced for committing criminal offenses in the field of financial services and/or the economy based on a court decision that has permanent legal force;
4. never sentenced for committing criminal offenses based on a court decision that has permanent legal force within the last 5 (five) years;
5. never declared bankrupt or causing a business entity to be declared bankrupt based on a court decision that has permanent legal force within the last 5 (five) years;
6. do not hold concurrent positions as Directors in other MFI/ISFM*) for Directors;
7. do not hold concurrent positions as Commissioners in more than 2 (two) other MFI/ISFM*) for Directors; and
8. do not hold concurrent positions as Commissioners in more than 3 (three) other MFI/ISFM*) for Commissioners;
   d. letter of statement from the Board of Directors stating that the party concerned is willing to manage and administer the MFI/ISFM*) responsibly and in accordance with applicable laws and regulations; e. letter of certificate/written proof of operational experience in microfinance institutions or other financial service institutions for at least 1 (one) year for one of the Directors; f. letter of certificate/written proof of operational experience in Islamic microfinance institutions or other Islamic financial service institutions for at least 1 (one) year for one of the Directors, for ISFM;

3. Data of shareholders including details of share ownership/member data*)
4. Letter of recommendation for the appointment of DPS from the MUI Sharia Board or DPS training certificate from the MUI Sharia Board for ISFM.
5. Organizational structure and management which has at least the functions of credit decision-making, collection, and administration.
6. Work systems and procedures.
7. Work plan for the first 2 (two) years.
8. Proof that paid-up capital or basic deposits, mandatory deposits, and grants are made in cash in the form of fixed-term deposits at one of the banks/Islamic banks or Sharia business units*) in Indonesia.
9. Proof of operational readiness, including:
   a. list of fixed assets (if any) and inventory; b. proof of ownership or control of the office; and
   c. list of branch offices and their addresses (if any).
10. Opening financial position report.

This is our application and for your attention, Sir/Madam*), we thank you.

Board of Directors
PT/Cooperative*) MFI/ISFM*)..........
………………………………
*) delete what is not necessary

EXAMPLE FORMAT 2 APPLICATION FOR BUSINESS LICENSE OF MICROFINANCE INSTITUTION WITH NON-CASH CAPITAL DEPOSITS

To the
Executive Head of IKNB Supervision, Financial Services Authority through the MFI Directorate/OJK Office/Regional Office*) ………… Jl ……………….. ………………..

Referring to Financial Services Authority Regulation Number /POJK.05/2021 concerning Business Licensing and Institutional Framework of Microfinance Institutions, we hereby apply for a business license as a Microfinance Institution (MFI):
Name : PT/Cooperative*) MFI/ISFM*) .....
Address : .....
District/City .....
Province .....
Phone/fax No. : .....
Email : .....

To complete the aforementioned application, we hereby submit the following documents:

1. Deed of establishment of PT/Cooperative*) MFI/ISFM*) .....
   including articles of association and any amendments that have been approved/consented by the competent authority or notified to the competent authority.
2. Closing financial position report and opening financial position report from the MFI/ISFM*).
3. Audited annual financial reports for MFI/ISFM*) with assets of at least Rp1,000,000,000.00 (one billion rupiah) for the last 1 (one) year, accompanied by the previous year's financial report.
4. Annual financial reports consisting of at least financial position reports and income statements for MFI/ISFM*) with assets below Rp1,000,000,000.00 (one billion rupiah) for the last 2 (two) years.
5. List of MFI/ISFM*) Loans/Financing for the last 2 (two) years.
6. Data of the Board of Directors, Board of Commissioners, Sharia Supervisory Board (DPS), shareholders, or members.
7. Organizational structure and management.
8. Work systems and procedures of the MFI/ISFM*).

This is our application and for your attention, Sir/Madam*), we thank you.

Board of Directors
PT/Cooperative*) MFI/ISFM*)......
………………………………
*) delete what is not necessary

EXAMPLE FORMAT 3 MICROFINANCE LOAN/FINANCING LIST

A. MICROFINANCE INSTITUTION (CONVENTIONAL) LOAN LIST

NAME OF MFI:
REPORTING PERIOD:

No.
I
Name of Borrower
II
Type of Installment
III
Installment Amount/Duration
IV
Interest Rate %
V
Loan Balance
VI
Overdue Installment Amount/Duration
VII
Collectibility
VIII
Description
IX
TOTAL LOANS GIVEN TO THE COMMUNITY xxx

(harian/mingguan/bulanan/selapanan/musiman)
DD/MM/YYYY
DD/MM/YYYY
(per day, per week, per month, per selapanan, per season) (lancar, diragukan, macet)

...

EXPLANATION OF THE DETAILED LIST OF LOANS GIVEN TO THE COMMUNITY

I. Number
Filled with the serial number.

II. Name of Borrower
Filled with the name of the borrower.

III. Type of Installment
This is the type of installment payment, which can be distinguished as:

1. Daily
   The type of installment payment is determined based on the number of days.
2. Weekly
   The type of installment payment is determined based on the number of weeks.
3. Monthly
   The type of installment payment is determined based on the number of months.
4. Selapanan
   The type of installment payment is determined based on the number of selapanan.
5. Seasonal
   The type of installment payment is determined based on the number of seasons.

IV. Duration

1. Start
   This is the date, month, and year the loan began as stated in the agreement or contract.
2. Maturity
   This is the date, month, and year the loan ended as stated in the agreement or contract.

V. Interest Rate

1. Percentage (%)
   This is the loan interest rate charged by the MFI to the borrower, expressed in %.
2. Description
   This is the period for applying the interest rate, e.g., per day, per week, per month, per selapanan, or per season.

VI. Loan Balance
Filled with the total loan balance given by the MFI to each borrower on the reporting date.

VII. Overdue Installment Amount/Duration

1. For daily, weekly, monthly/selapanan installment types:
   Filled with the duration in days of the overdue installment, e.g., 4 (four) days, 4 (four) weeks, 4 (four) months, etc.
2. For seasonal installment type:
   Filled with the frequency of overdue installments, e.g., 1x, 2x, etc.

VIII. Collectibility
Filled according to the quality of the loan/financing as regulated in the Financial Services Authority Regulation concerning the Conduct of MFI Business.

IX. Total Loans Given to the Community
This is the total loan balance given to the community, as stated in the financial position report.

B. MICROFINANCE INSTITUTION (SHARIA) FINANCING LIST CONDUCTING BUSINESS BASED ON SHARIA PRINCIPLES (MFI-S)

a. Detailed List of Murabahah Receivables/Istishna Receivables/Receivables/Other Financing

NAME OF MFI-S:
REPORTING PERIOD:

No.
I
Name of Customer Recipient
II
Type of Installment
III
Installment Amount/Duration
IV
Duration
V
Rate of Return %
VI
Receivable Balance
VII
Overdue Installment Amount/Duration
VIII
Collectibility
IX
TOTAL MURABAHAH RECEIVABLES/ISTISHNA RECEIVABLES/RECEIVABLES/OTHER FINANCING xxx

(harian/mingguan/bulanan/selapanan/musiman)
DD/MM/YYYY
DD/MM/YYYY
(per day, per week, per month, per selapanan, per season) (lancar, diragukan, macet)

...

EXPLANATION OF THE DETAILED LIST OF MURABAHAH RECEIVABLES/ISTISHNA RECEIVABLES/RECEIVABLES/OTHER FINANCING

I. Number
Filled with the serial number.

II. Name of Customer Recipient
Filled with the name of the customer receiving the murabahah/istishna/receivables/other financing facility.

III. Type of Installment
This is the type of installment payment, which can be distinguished as:

1. Daily
   The type of installment payment is determined based on the number of days.
2. Weekly
   The type of installment payment is determined based on the number of weeks.
3. Monthly
   The type of installment payment is determined based on the number of months.
4. Selapanan
   The type of installment payment is determined based on the number of selapanan.
5. Seasonal
   The type of installment payment is determined based on the number of seasons.

IV. Duration

1. Start
   This is the date, month, and year the murabahah receivable/istishna receivable/receivables/other financing began as stated in the agreement or contract.
2. Maturity
   This is the date, month, and year the murabahah receivable/istishna receivable/receivables/other financing ended as stated in the agreement or contract.

V. Rate of Return

1. Percentage (%)
   This is the rate of return in the form of a percentage of the realization of the margin of the murabahah receivable/istishna receivable/receivables/other financing facility charged by the MFI-S to the customer recipient, expressed in percent (%).
2. Description
   This is the period for paying the return in the form of margin, e.g., per day, per week, per month, per selapanan, or per season.

VI. Receivable Balance
Filled with the total balance of Murabahah Receivables/Istishna Receivables/Receivables/Other Financing to each customer on the reporting date.

VII. Overdue Installment Amount/Duration

1. For daily, weekly, monthly/selapanan installment types:
   Filled with the duration in days of the overdue installment, e.g., 4 (four) days, 4 (four) weeks, 4 (four) months, etc.
2. For seasonal installment type:
   Filled with the frequency of overdue installments, e.g., 1x, 2x, etc.

VIII. Collectibility
Filled according to the quality of the loan/financing as regulated in the Financial Services Authority Regulation concerning the Conduct of MFI Business.

IX. Total Murabahah Receivables/Istishna Receivables/Receivables/Other Financing
This is the total balance of murabahah receivables/istishna receivables/receivables/other financing, as stated on the asset side of the financial position report.

b. Detailed List of Salam Receivables

NAME OF MFI-S:
REPORTING PERIOD:

No.
I
Name of Supplier
II
Type of Goods Delivery Installment
III
Duration
IV
Receivable Balance
V
Overdue Goods Delivery Amount/Duration
VI
Collectibility
VII
TOTAL SALAM RECEIVABLES xxx

(harian/mingguan/bulanan/selapanan/musiman)
DD/MM/YYYY
DD/MM/YYYY
(lancar, diragukan, macet)

...

EXPLANATION OF THE DETAILED LIST OF SALAM RECEIVABLES

I. Number
Filled with the serial number.

II. Name of Supplier
Filled with the name of the supplier.

III. Type of Goods Delivery Installment
This is the type of goods delivery installment, which can be distinguished as:

1. Daily
   The type of goods delivery installment is determined based on the number of days.
2. Weekly
   The type of goods delivery installment is determined based on the number of weeks.
3. Monthly
   The type of goods delivery installment is determined based on the number of months.
4. Selapanan
   The type of goods delivery installment is determined based on the number of selapanan.
5. Seasonal
   The type of goods delivery installment is determined based on the number of seasons.

IV. Duration

1. Start
   This is the date, month, and year the salam receivable began as stated in the agreement or contract.
2. Maturity
   This is the date, month, and year the salam receivable ended as stated in the agreement or contract.

V. Receivable Balance
Filled with the total balance of Salam Receivables to each supplier on the reporting date.

VI. Overdue Goods Delivery Amount/Duration

1. For daily, weekly, monthly/selapanan goods delivery types:
   Filled with the duration in days of the overdue goods delivery, e.g., 4 (four) days, 4 (four) weeks, 4 (four) months, etc.
2. For seasonal goods delivery type:
   Filled with the frequency of overdue goods deliveries, e.g., 1x, 2x, etc.

VII. Collectibility
Filled according to the quality of the loan/financing as regulated in the Financial Services Authority Regulation concerning the Conduct of MFI Business.

VIII. Total Salam Receivables
This is the total amount of Salam Receivables, as stated on the asset side of the financial position report.

c. Detailed List of Mudharabah Financing/Musyarakah Financing

NAME OF MFI-S:
REPORTING PERIOD:

No.
I
Name of Customer Recipient
II
Type of Installment
III
Duration
IV
Profit Sharing Rate (%)
V
Revenue Realization
VI
Revenue Projection
VII
Financing Balance
VIII
Overdue Installment Amount/Duration
IX
Collectibility
X
TOTAL MUDHARABAH FINANCING/MUSYARAKAH FINANCING xxx

(harian/mingguan/bulanan/selapanan/musiman)
DD/MM/YYYY
DD/MM/YYYY
(lancar, diragukan, macet)

...

EXPLANATION OF THE DETAILED LIST OF MUDHARABAH FINANCING/MUSYARAKAH FINANCING

I. Number
Filled with the serial number.

II. Name of Customer Recipient
Filled with the name of the customer receiving mudharabah/musyarakah financing.

III. Type of Installment
This is the type of installment payment, which can be distinguished as:

1. Daily
   The type of installment payment is determined based on the number of days.
2. Weekly
   The type of installment payment is determined based on the number of weeks.
3. Monthly
   The type of installment payment is determined based on the number of months.
4. Selapanan
   The type of installment payment is determined based on the number of selapanan.
5. Seasonal
   The type of installment payment is determined based on the number of seasons.

IV. Duration

1. Start
   This is the date, month, and year the mudharabah financing began as stated in the agreement or contract.
2. Maturity
   This is the date, month, and year the mudharabah financing ended as stated in the agreement or contract.

V. Profit Sharing Rate (%)
This is the rate of return on mudharabah/musyarakah financing obtained by the MFI-S, expressed in percent (%).

VI. Revenue Realization
Filled with the amount of revenue obtained by the MFI-S from the customer for mudharabah/musyarakah financing after considering the profit-sharing ratio, on the reporting date.

VII. Revenue Projection
Filled with the estimated amount of revenue that the MFI-S will obtain from the customer for mudharabah/musyarakah financing after considering the profit-sharing ratio, with the agreed amount and maturity date between the MFI and the customer, on the reporting date.

VIII. Financing Balance
Filled with the total financing balance to each customer on the reporting date.

IX. Overdue Installment Amount/Duration

1. For daily, weekly, monthly/selapanan installment types:
   Filled with the duration in days of the overdue installment, e.g., 4 (four) days, 4 (four) weeks, 4 (four) months, etc.
2. For seasonal installment type:
   Filled with the frequency of overdue installments, e.g., 1x, 2x, etc.

X. Collectibility
Filled according to the quality of the loan/financing as regulated in the Financial Services Authority Regulation concerning the Conduct of MFI Business.

XI. Total Mudharabah Financing/Musyarakah Financing
This is the total balance of mudharabah/musyarakah financing, as stated on the asset side of the financial position report.

EXAMPLE FORMAT 4 REPORT ON THE CONDUCT OF MICROFINANCE INSTITUTION BUSINESS ACTIVITIES

To the
Head of Executive Supervisor of IKNB, Financial Services Authority Through the MFI Directorate/OJK Office/Regional Office*) ………… Jl ……………….. ………………..

Referring to the Financial Services Authority Decision Letter Number ..... dated ..... regarding the issuance of a business license for Microfinance Institutions (MFI) to PT/Cooperative*) MFI/MFI-S*) ....., we hereby report that we have commenced business activities as an MFI/MFI-S*) on date ......

As supporting data, we hereby submit photocopies of evidence of the conduct of savings management and/or the disbursement of Loans/Financing.

This report is submitted, and we thank you for your attention, Sir/Madam*).

Board of Directors
PT/Cooperative*) MFI/MFI-S*) .....

........................
*) Delete as necessary

EXAMPLE FORMAT 5 REPORT ON CHANGES IN SHAREHOLDERS

To the
Head of Executive Supervisor of IKNB, Financial Services Authority Through the MFI Directorate/OJK Office/Regional Office*) ………… Jl ……………….. ………………..

We hereby report that in accordance with the General Meeting of Shareholders (GMS) dated ..... changes in shareholders have been made, namely:

Old
New
Name of Shareholder
Share Value (Rp)
Name of Shareholder
Share Value (Rp)
.....
.....
.....
.....
.....
.....
.....
.....

As supporting data, we hereby submit:

1. Evidence of changes in shareholders that has been approved or recorded by the competent authority.
2. Shareholder data:
   a. In the case of individuals, it is mandatory to attach:
   1. photocopy of identification in the form of an Identity Card (KTP);
   2. a stamped letter of statement stating that the capital deposit does not originate from loans and does not originate from and for money laundering criminal acts.
      b. In the case of cooperatives or village/village-owned enterprises, it is mandatory to attach:
   3. deed of establishment including the articles of association including the latest changes in accordance with applicable laws and regulations or evidence of establishment of village/village-owned enterprises;
   4. financial reports audited by a public accountant or the latest financial report or latest financial bookkeeping;
   5. photocopy of identification in the form of an Identity Card (KTP) for the board of directors or management of village/village-owned enterprises and/or cooperatives;
   6. a stamped letter of statement from the shareholder that the capital deposit does not originate from loans and does not originate from and for money laundering criminal acts.
      c. In the case where the shareholder is a District/City Regional Government, it is attached with a decision or Regional Regulation of the District/City regarding capital participation in the MFI.

This report is submitted, and we thank you for your attention, Sir/Madam*).

Board of Directors
PT MFI/MFI-S*) .....

..............................
*) Delete as necessary

EXAMPLE FORMAT 6 REPORT ON CHANGES IN BOARD OF DIRECTORS/BOARD OF COMMISSIONERS/SHARIA SUPERVISORY BOARD OF MICROFINANCE INSTITUTIONS

To the
Head of Executive Supervisor of IKNB, Financial Services Authority Through the MFI Directorate/OJK Office/Regional Office*) ………… Jl ……………….. ………………..

We hereby report that in accordance with the GMS/Member Meeting*) dated ..... changes to the Board of Directors and/or Board of Commissioners or Sharia Supervisory Board have been made, namely:

Old
New
Chief Commissioner
.....
.....
Commissioner
.....
.....
Chief Director
.....
.....
Director
.....
.....
Sharia Supervisory Board
.....
.....
Sharia Supervisory Board
.....
.....

As supporting data, we hereby submit:

1. Evidence of changes to the Board of Directors and/or Board of Commissioners or Sharia Supervisory Board that has been approved or reported to the competent authority.)
2. Minutes of the member meeting*)
3. Data on the Board of Directors and/or Board of Commissioners includes:
   a. photocopy of identification in the form of an Identity Card (KTP); b. curriculum vitae;
   c. letter of statement:
   1. no concurrent positions at other MFIs for the Board of Directors;
   2. no concurrent positions as Board of Commissioners at more than 2 (two) other MFIs for the Board of Directors;
   3. no concurrent positions as Board of Commissioners at more than 3 (three) other MFIs for the Board of Commissioners.
4. Data on the Sharia Supervisory Board includes:
   a. photocopy of identification in the form of an Identity Card (KTP); b. curriculum vitae; and
   c. letter of recommendation from the National Sharia Board of the Indonesian Ulema Council or training certificate for the Sharia Supervisory Board from the NSB MUI;

This report is submitted, and we thank you for your attention, Sir/Madam*).

Board of Directors
PT/Cooperative*)
MFI/MFI-S*) ..................

………………………………
*) Delete as necessary
) Applicable to MFIs in the form of a limited liability company *) Applicable to MFIs in the form of a cooperative legal entity

EXAMPLE FORMAT 7 REPORT ON CHANGES IN MICROFINANCE INSTITUTION CAPITAL

To the
Head of Executive Supervisor of IKNB, Financial Services Authority Through the MFI Directorate/OJK Office/Regional Office*) ………… Jl ……………….. ………………..

Referring to Financial Services Authority Regulation Number........./POJK.05/2021 concerning Business Licensing and Institutional Aspects of Microfinance Institutions, we hereby report that in accordance with the GMS of the MFI/MFI-S*) dated ..... month ..... year ...... changes in capital have been made, namely:

Old
New
Authorized Capital
.....
.....
Paid-up Capital
.....
.....

Old
New
Name of Shareholder
Share Value (Rp)
Name of Shareholder
Share Value (Rp)
.....
.....
.....
.....
.....
.....
.....
.....

As supporting data, we hereby submit:

1. Evidence of capital changes that has been approved or reported to the competent authority;
2. Shareholder data:
   a. In the case of individuals, it is mandatory to attach:
   1. photocopy of identification in the form of an Identity Card (KTP);
   2. a stamped letter of statement stating that the capital deposit does not originate from loans and does not originate from and for money laundering criminal acts and/or terrorism financing.
      b. In the case of cooperatives or village/village-owned enterprises, it is mandatory to attach:
   3. deed of establishment including the articles of association including the latest changes in accordance with applicable laws and regulations or evidence of establishment of village/village-owned enterprises;
   4. financial reports audited by a public accountant or the latest financial report or latest financial bookkeeping;
   5. photocopy of identification in the form of an Identity Card (KTP) for the board of directors or management of village/village-owned enterprises and/or cooperatives;
   6. a stamped letter of statement from the shareholder that the capital deposit does not originate from loans and does not originate from and for money laundering criminal acts and/or terrorism financing.
      c. In the case where the shareholder is a District/City Regional Government, it is attached with a decision or Regional Regulation of the District/City regarding capital participation in the MFI.

This report is submitted, and we thank you for your attention, Sir/Madam*).

Board of Directors
PT MFI/MFI-S*) ..................

………………………………

*) Delete as necessary

EXAMPLE FORMAT 8 REPORT ON CHANGES IN THE NAME OF MICROFINANCE INSTITUTIONS

To the
Head of Executive Supervisor of IKNB, Financial Services Authority Through the MFI Directorate/OJK Office/Regional Office*) ………… Jl ……………….. ………………..

Referring to Financial Services Authority Regulation Number........./POJK.05/2021 concerning Business Licensing and Institutional Aspects of Microfinance Institutions, we hereby report that in accordance with the GMS/Member Meeting*) dated ..... month .... year .... the name of PT/Cooperative*) MFI/MFI-S*) ..... has changed to PT/Cooperative*) MFI/MFI-S*) ......
This name change has received approval from ............... with decision number ..... dated ..... month ..... year.....)

As supporting data, we hereby submit:
a. minutes of the GMS/Member Meeting*) regarding the name change of the MFI/MFI-S*); b. evidence of changes to the articles of association that has been approved by the competent authority/ evidence of reporting to the competent authority*); and
c. evidence of announcement of the name change through a notice board at the MFI/MFI-S*) office or a local daily newspaper.

This report is submitted, and we thank you for your attention, Sir/Madam*).

Board of Directors
PT/Cooperative*)
MFI/MFI-S*) .....
……………………
*) Delete as necessary
) This sentence is used for MFIs with limited liability company legal entity status

EXAMPLE FORMAT 9 REPORT ON THE TRANSFER OF MICROFINANCE INSTITUTION OFFICE ADDRESS

To the
Head of Executive Supervisor of IKNB, Financial Services Authority Through the MFI Directorate/OJK Office/Regional Office*) ………… Jl ……………….. ………………..

We hereby report that the office address has been moved, namely:

Old Address
New Address
Office Name
.....
.....
Office Name
.....
.....

As supporting data, we hereby submit:

1. evidence of announcement to the public regarding the office address transfer through a local daily newspaper or notice board at the old MFI/MFI-S*) office, in a place easily accessible to the public; and
2. evidence of control over the new office.

This report is submitted, and we thank you for your attention, Sir/Madam*).

Board of Directors
PT/Cooperative*) MFI/MFI-S*) ....

………………………………
*) Delete as necessary

EXAMPLE FORMAT 10 APPLICATION FOR APPROVAL OF MERGER

To the
Head of Executive Supervisor of IKNB, Financial Services Authority Through the MFI Directorate/OJK Office/Regional Office*) ………… Jl ……………….. ………………..

Referring to Financial Services Authority Regulation Number........./POJK.05/2021 concerning Business Licensing and Institutional Aspects of Microfinance Institutions, we hereby submit an application for approval to conduct a merger of PT/Cooperative*) MFI/MFI-S*).

As supporting data, we hereby submit the following documents:

1. Minutes of the General Meeting of Shareholders or Member Meeting of the MFI/MFI-S*) conducting the merger;
2. Draft amendment to the articles of association of the MFI/MFI-S*) receiving the Merger );
3. Plan for the settlement of rights and obligations of the MFI/MFI-S*) that will conduct the merger; and
4. Projection of the financial position report and income statement of the MFI/MFI-S*) that will receive the merger for 2 (two) years.

This application is submitted, and we thank you for your attention, Sir/Madam*).

Board of Directors
PT/Cooperative*) MFI/MFI-S*) .....
........................
*) Delete as necessary
) If applicable

EXAMPLE FORMAT 11 APPLICATION FOR APPROVAL OF ABSORPTION

To the
Head of Executive Supervisor of IKNB, Financial Services Authority Through the MFI Directorate/OJK Office/Regional Office*) ………… Jl ……………….. ………………..

Referring to Financial Services Authority Regulation Number........./POJK.05/2021 concerning Business Licensing and Institutional Aspects of Microfinance Institutions, we hereby submit an application for approval to conduct an absorption of PT/Cooperative*) MFI/MFI-S*).

As supporting data, we hereby submit the following documents:

1. Minutes of the General Meeting of Shareholders or Member Meeting of the MFI/MFI-S*) conducting the absorption;
2. Articles of association of the MFI/MFI-S*) resulting from the absorption;
3. Plan for the settlement of rights and obligations of the MFI/MFI-S*) that will conduct the absorption; and
4. Projection of the financial position report and income statement of the MFI/MFI-S*) that will receive the result of the absorption for 2 (two) years.

This application is submitted, and we thank you for your attention, Sir/Madam*).

Board of Directors
PT/Cooperative*) MFI/MFI-S*) .....
........................
*) Delete as necessary

EXAMPLE FORMAT 12 REPORT ON THE CONDUCT OF MERGER

To the
Head of Executive Supervisor of IKNB, Financial Services Authority Through the MFI Directorate/OJK Office/Regional Office*) ………… Jl ……………….. ………………..

In accordance with the merger approval as per OJK Letter Number ...... dated ..... month.... year ......, we hereby report that in accordance with the GMS/Member Meeting*) dated ..... month .... year .... a merger has been conducted between PT/Cooperative*) MFI/MFI-S*) ..... and PT/Cooperative*) MFI/MFI-S*) ......

As supporting data, we hereby submit the following documents:

1. Photocopy of the amendment to the articles of association of the MFI/MFI-S*) receiving the merger that has been ratified or approved by the competent authority, or reported to the competent authority;
2. Organizational structure and management of the MFI/MFI-S*) resulting from the merger containing data on the Board of Directors, Board of Commissioners, shareholders or members, and DPS);
3. Financial position report and income statement of the MFI/MFI-S*) receiving the merger; and
4. Full address of the MFI/MFI-S*) resulting from the merger.

This report is submitted, and we thank you for your attention, Sir/Madam*).

Board of Directors
PT/Cooperative*) MFI/MFI-S*) .....
..........................
*) Delete as necessary
) for MFIs conducting business based on Sharia Principles

EXAMPLE FORMAT 13 REPORT ON THE CONDUCT OF ABSORPTION

To the
Head of Executive Supervisor of IKNB, Financial Services Authority Through the MFI Directorate/OJK Office/Regional Office*) ………… Jl ……………….. ………………..

It is hereby reported that in accordance with the GMS/members' meeting*) dated ..... a merger has been carried out between PT/Cooperative*) MFI ..... and PT/Cooperative*) MFI ..... resulting in PT/Cooperative*) MFI ......

As consideration material, we hereby submit the following documents:

1. photocopy of the MFI/MFSI*) articles of association resulting from the merger, which has been approved or agreed upon by the competent authority;
2. organizational structure and management of the MFI/MFSI*) resulting from the merger, containing data of the Board of Directors, Board of Commissioners, shareholders or members, and/or DPS*)
3. financial position report and profit/loss statement of the MFI/MFSI*) receiving the merger; and
4. complete address of the merged MFI.

This report is submitted, and for your attention, Sir/Madam*), we express our gratitude.

Board of Directors
PT/Cooperative*) MFI/MFSI*) ..................
......................................

*) Strike out what is not necessary
) for MFIs conducting business activities based on Sharia Principles

EXAMPLE FORMAT 14 REPORT ON THE EXECUTION OF OPENING A MICROFINANCE INSTITUTION BRANCH OFFICE

To the
Executive Head of IKNB Supervision, Financial Services Authority Through the MFI Directorate/OJK Office/Regional Office*) ………… Jl ……………….. ………………..

Referring to the Financial Services Authority Regulation Number
..../POJK.05/2021 concerning Business Licensing and Institutional Framework for Microfinance Institutions, it is hereby reported that our branch office with address ..... has conducted business activities since date ..... month .... year ......

As completeness of data, we hereby attach the following documents:

1. photocopy of proof of execution of Savings management activities and/or Loan/Financing disbursement;
2. proof of control of the branch office; and
3. organizational structure and personnel of the branch office.

This report is submitted, and for your attention, Sir/Madam*), we express our gratitude.

Board of Directors
PT/Cooperative*) MFI/MFSI*) .....
...............................
*) Strike out what is not necessary

EXAMPLE FORMAT 15 REPORT ON THE CLOSURE OF A MICROFINANCE INSTITUTION BRANCH OFFICE

To the
Executive Head of IKNB Supervision, Financial Services Authority through the MFI Directorate/OJK Office/Regional Office*) ………… Jl ……………….. ………………..

Referring to the Financial Services Authority Regulation
Number........./POJK.05/2021 concerning Business Licensing and Institutional Framework for Microfinance Institutions, we hereby report closing our branch office located at ..... since date .... month .... year .... with the reason ......

As consideration material, we hereby submit proof of the transfer or settlement of rights and obligations to Depositors, borrowers or Financing recipients, and/or other parties becoming the responsibility of PT/Cooperative*) MFI/MFSI*) ..... branch office ......

This report is submitted, and for your attention, Sir/Madam*), we express our gratitude.

Board of Directors
PT/Cooperative*) MFI/MFSI*) .....

……………………
*) Strike out what is not necessary

EXAMPLE FORMAT 16 REPORT ON CHANGES IN BUSINESS COVERAGE AREA DUE TO AREA EXPANSION OF MICROFINANCE INSTITUTIONS

To the
Executive Head of IKNB Supervision, Financial Services Authority Through the MFI Directorate/OJK Office/Regional Office*) ………… Jl ……………….. ………………..

In connection with the expansion of the area of Village/Sub-district or District or Regency/City or Province*) .............. we hereby report that PT/Cooperative ) MFI/MFSI ... which originally had its domicile and business coverage area at:
Village/Sub-district : .....
District : .....
Regency/City : .....
has changed to:
Village/Sub-district : .....
District : .....
Regency/City : .....
As completeness of data, we hereby submit information on borrower/Financing recipients and/or Depositors located outside the business coverage area, as follows:
No. Name of Borrower/Financing Recipient Amount of Loan/Financing Due Date

1. ... ... ...

2. ... ... ...

3. ... ... ...
   No. Name of Depositor Amount of Savings

4. ... ... ...

5. ... ... ...

6. ... ... ...

This report is submitted, and for your attention, Sir/Madam*), we express our gratitude.

Board of Directors
PT/Cooperative*) MFI/MFSI*) .....
.........................

*) Strike out what is not necessary

This copy is consistent with the original
Legal Director 1
Legal Department signed
Mufli Asmawidjaja
EXAMPLE FORMAT 17 REPORT ON PLANNED DEVELOPMENT OF BUSINESS COVERAGE AREA

To the
Executive Head of IKNB Supervision, Financial Services Authority Through the MFI Directorate/OJK Office/Regional Office*) ………… Jl ……………….. ……………….. We hereby submit a report on the planned development of the MFI/MFSI*) business coverage area as follows:
Originally Becomes
Village/Sub-district ........
or District ......... )
District .......
or Regency/City ........)
As completeness of data, we hereby submit the minutes of the General Meeting of Shareholders or members' meeting of the MFI/MFSI*) regarding the development of the MFI/MFSI*) business coverage area.

This report is submitted, and for your attention, Sir/Madam*), we express our gratitude.

Board of Directors
PT/Cooperative*) MFI/MFSI*) ........
......................
*) Strike out what is not necessary

Established in Jakarta on date 22 June 2021
CHAIRMAN OF THE BOARD OF COMMISSIONERS
FINANCIAL SERVICES AUTHORITY
REPUBLIC OF INDONESIA, signed
WIMBOH SANTOSO