Judges Determine Sharia Online Loans Cannot Be Equated with Conventional Loans

JAKARTA, KOMPAS.com - The panel of judges at the Commercial Court of Central Jakarta has ruled that sharia-based online loan services cannot be equated with conventional online loans.

The fundamental differences in operational principles between the two were a key consideration for the judges in overturning the decision made by the Business Competition Supervisory Commission (KPPU), which set an upper limit on interest rates for online loans concerning 97 business entities.

Central Jakarta District Court spokesperson Sunoto stated that the panel accepted the objections raised by business operators against KPPU Decision No. 05/KPPU-I/2025 dated March 26, 2026.

"This decision was announced in an open court session on Thursday (October 22, 2026)," Sunoto said, as quoted from a press release on Friday (October 23, 2026).

In their reasoning, the judges disagreed with the KPPU's stance that the interest rate caps set in the guidelines of the Indonesian Fintech Peer-to-Peer Lending Association (AFPI) apply to all business operators, regardless of whether they operate on conventional or sharia principles.

"The judges believe there are business operators dealing with different or non-substitutable goods or services," stated the panel in its reasoning.

According to the judges, there is a fundamental difference between the operations of conventional and sharia online loans, particularly regarding interest application.

The principles of sharia do not recognize interest as applied in the conventional system. Moreover, sharia-based operators are monitored by a Sharia Supervisory Board.

Based on these differences, the judges concluded that the conventional and sharia online loan markets are not the same or interchangeable.

This condition was deemed not to meet the criteria for determining the relevant market in the competition case.

"Because the conventional market and the sharia market are not the same or interchangeable, it does not meet the requirements of the relevant market," the judges clarified.

The judges also differentiated between the upper limit of interest rates (price ceiling) and price setting (price fixing).

The judges ruled that setting an upper limit on interest is not a practice prohibited by law.

This policy was viewed as protecting consumers from the arbitrariness of business operators in setting loan interest rates.

"Thus, this determination protects consumers or society from the arbitrariness of business operators when setting loan interest rates," stated the judges.

Judges consider OJK's directives

The judges also took into account the role of the Financial Services Authority (OJK) in regulating the upper limits on online loan interest rates.