JHP Journal Editor’s Note
By Cecep Mustafa
The Gospel of Progress—and Its Price
Indonesia has always been a believer in progress. When the gospel of Financial Technology—Fintech—arrived, it came cloaked in the language of liberation. The future, it promised, would be frictionless. Money would move faster, bureaucracy would melt, and even those long invisible to banks would find a seat at the digital table.
But every revolution has its casualties, and every innovation its shadow. The very code written to democratize finance has also mechanized exploitation. What began as a promise of inclusion has, in too many cases, devolved into a sophisticated engine of economic harm—a digital loan shark in a suit, speaking the language of “empowerment.”
This is not an argument against technology. It is an argument for justice—the kind that doesn’t disappear when you click “Accept Terms and Conditions.”
When Progress Preys on the Vulnerable
We often measure success in numbers: growth rates, market size, valuation. But if justice means anything at all, we must also measure the bruises left beneath the balance sheet.
Take the story of Indonesia’s Peer-to-Peer (P2P) lending boom. It was elegant in theory: remove the middlemen, connect lenders directly to borrowers, and let code handle the rest. For those shut out of formal banking, it felt like grace. All you needed was a KTP and a smartphone.
Then came the calls. The threats. The shame.
PT. Barracuda Fintech Indonesia—a name so on-the-nose it might have been satire—was one of nearly two thousand illegal lending platforms found to be harassing borrowers, extorting payments, and weaponizing personal data. By the end of 2019, regulators had identified almost 1,900 such entities. The figure is less a statistic than a confession: this wasn’t a few bad actors, but a system quietly built to fail the poor.
Progress, it turns out, has a dark sense of humor.
The Market That Forgot to Compete
If illegal operators exploit from the shadows, their more respectable cousins do so in daylight—legally, politely, and in full compliance with the forms.
Consider the Asosiasi Fintech Pendanaan Bersama Indonesia (AFPI), the industry body blessed by the Financial Services Authority (OJK) to represent P2P lenders. In theory, AFPI was meant to uphold ethical standards. In practice, it seems to have functioned like a velvet-gloved cartel. With 128 of 164 registered lenders as members—78% of the entire market—it quietly set a uniform interest rate of 0.8% per day.
No competition. No choice. Just a digital version of all the old collusions, now automated.
Economists might call it an oligopoly. Lawyers might call it a violation of Law No. 5/1999 on anti-monopoly practices. But ordinary citizens call it something simpler: unfair. The irony is exquisite. In the name of innovation and inclusion, a system designed to break monopolies ended up recreating them—just with better branding and cleaner fonts.
The Law’s Long Shadow
Indonesia does have rules. They just haven’t caught up with the machines.
The primary framework for P2P lending—OJK Regulation No. 77/2016—was written when Fintech was still a novelty. It was never designed for an ecosystem capable of self-replicating digital cartels. The law, in short, was outcoded.
Here lies the philosophical problem: when regulators define Fintech platforms as “technology companies” rather than “financial institutions,” they effectively strip themselves of the power to regulate their behavior. It’s a bureaucratic magic trick worthy of Kafka—except the disappearing act hides justice itself.
Meanwhile, private associations like AFPI step into the void, setting interest rates, dictating terms, and shaping markets without public accountability. They have, in essence, privatized financial regulation—a quiet coup against the state’s monopoly on justice.
Rawls in Jakarta: A Blueprint for Digital Fairness
John Rawls, the philosopher of fairness, once asked us to imagine designing society from behind a “veil of ignorance”—not knowing whether we would be rich or poor, powerful or powerless. If Indonesia’s Fintech ecosystem were designed under that veil, would any of us feel safe to borrow?
The answer is self-evident.
The digital economy, if it is to survive with legitimacy, must pass a Rawlsian test: ensuring that those least advantaged—borrowers, gig workers, the digitally desperate—are not reduced to mere data points in someone else’s profit model.
That means “embodying” justice not as an afterthought, but as architecture. Law must stop reacting to innovation and start anticipating it. A truly modern framework must:
- Reach Beyond Borders. Extend extraterritorial jurisdiction to pursue foreign Fintech actors who harm Indonesians from abroad. Justice cannot stop at the water’s edge.
- Name the Real Players. Expand the legal definition of “business actors” to include industry associations like AFPI, so collective misconduct can no longer hide behind corporate logos.
- Redraw the Map. Redefine the “relevant market” in digital terms—one that recognizes that the online world has no geography, and that power can be concentrated invisibly, by algorithm.
This is not regulatory ambition—it is moral necessity.
From Disruption to Dignity
Indonesia’s Fintech story is a parable of our age. The dream was access; the reality, often, is abuse. The platforms that promised empowerment have instead amplified inequality, proving that technology without ethics is merely a faster road to the same injustices.
To strip the suit from the digital loan shark is not to reject innovation. It is to remind innovation who it serves.
Law, if it is to mean anything, must reassert its purpose—not as a brake on progress, but as its conscience. For without justice, disruption is indistinguishable from predation. And without dignity, no amount of code can claim to be progress.
The time has come, then, to rewrite not just our regulations, but our moral software—to ensure that in the brave new economy of the cloud, humanity remains not the collateral, but the cause.
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