JAKARTA (Reuters) - Customers who borrow funds through Indonesia's illegal financial technology lenders do not need to repay their loans, Deputy Communications Minister Samuel Pengerapan said on Tuesday.
Indonesia is battling a wave of unlicensed "fintech" lenders who avoid registering with authorities and often employ aggressive debt collection practices.
"The borrower can borrow as much as they like because the lender is not official. It's hard to reverse it," Pengerapan told reporters.
"If the companies try to collect their debt, report them, authorities will arrest them because they are not licensed."
Pengerapan encouraged consumers to first check whether the company they were dealing with was among the 73 fintech companies licensed by authorities.
Regulators have banned more than 400 fintech lenders for operating without a license, with the communications ministry then blocking their websites in Indonesia.
An investigation by Reuters in September found that many of Indonesia's banned lenders had come from China following a crackdown on the loosely regulated micro-credit sector there.
Four customers who failed to repay loans on time told Reuters that Chinese fintech lenders took control of their phone contacts – permission is granted when the app is installed - and harassed colleagues and friends for repayment.
(Reporting by Fanny Potkin; Editing by Robert Birsel)
