TaniFund 🌾 Dispute Exposes Fundamental Flaws in P2P Regulation

⚖️ The Rise and Fall of TaniFund and OJK Regulation

🌱 TaniFund, legally PT TaniFund Madani Indonesia, was part of the ambitious TaniHub group. It was registered in April 2018, obtained its full OJK license in April 2021, and saw that license revoked in May 2024.

TaniHub itself had raised significant capital, including a USD 65 million Series B round led by MDI Ventures of Telkom.

Its mission was to build a tech-enabled agriculture ecosystem: connecting farmers to markets, operating fulfillment centers, and offering financing options. TaniFund was designed to provide that financing through a peer-to-peer model.

• 📱 P2P lending itself was first introduced by OJK in 2016 as a way to democratize finance. The premise was simple: connect retail and institutional lenders directly with borrowers through digital platforms.

As such, by regulatory design, platforms like TaniFund were only intermediaries. They were prohibited from lending off their own balance sheets.

The idea was bold. The execution, however, has proven deeply flawed.

🛠️The Dispute

The four claimants in this case were retail lenders. They said repayment problems began in mid-2022 and that no repayments had been made since November of that year. They sued TaniFund for breach of contract under what was called the Loan Facilitation Agreement.

But here lies the structural weakness. The agreement was not a loan agreement between lenders and TaniFund. It was only a facilitation agreement. The actual loan agreement was between the lenders and the borrowers, i.e. the farmers.

TaniFund argued that it had not defaulted because it was never the borrower. The farmers were. Therefore, the lenders had sued the wrong party.

The court agreed in its verdict issued in November 2024.

🚨 Transparency, or the Lack of It

🔍 At first glance, TaniFund’s defense made sense. If it is only a facilitator, why should it be liable.

The problem is that lenders had no way of knowing who the borrowers were in the first place. OJK rules do not require platforms to disclose borrower identities. In fact, disclosure would violate personal data rules.

This leaves lenders in a legal vacuum. They cannot sue the platform, because it is not the borrower. They cannot sue the borrower, because they do not know who it is. And since most loans are unsecured, there is nothing to recover.

Former OJK P2P director Hendrikus Passagi, who testified in the case, defended this opacity.

🛡️ He argued that anonymity protects borrowers from harassment and safeguards financial privacy.
🔑 He suggested that the real protection for lenders lies not in transparency, but in ensuring platforms are credible and well-regulated.

That may sound reasonable in theory. In practice, it leaves retail lenders with no legal recourse. They lend into a black box. When defaults happen, their money vanishes.

The Flaw in P2P Lending Regulatory Design

The root of the problem lies in the P2P lending regulatory design.

The P2P model was framed as “loan facilitation,” not lending. This allowed platforms to claim that they were not financial institutions in the traditional sense. They were merely marketplaces.

But finance is not e-commerce. When transactions involve money, accountability and enforceability matter. By treating P2P platforms as neutral facilitators, OJK regulation effectively stripped lenders of their rights.

The irony is that OJK’s own justification was to protect borrowers from harassment and safeguard data privacy. In doing so, it created a system where lenders cannot even identify the party that owes them money.

📌 Lessons from the TaniFund Case

📉 The court’s decision to side with TaniFund was legally correct. Under the current rules, the claim was misdirected. But that verdict exposes how poorly the system protects those it was designed to attract.

The case shows at least three things.

• 🧑‍🌾 Retail lenders are structurally powerless. Borrower identities are hidden, suing platforms is futile, and most of the time there is no collateral to the loan

• 🔍 Transparency is absent. Unlike bonds or traditional lending, accountability lines are blurred to the point of invisibility

• 🛠️ Regulatory revisions miss the point. OJK tried technical fixes, but the core flaw of lack of transparency remains

📘 Epilogue: Time to Rethink the Model?

Indonesia has now gone close to six years without licensing a new P2P platform. Registrations stopped in 2019, a moratorium was declared in 2020, and the last upgrade to a full license was in 2021. That pause may not be accidental. It may reflect OJK’s own quiet recognition that the model is broken.

The TaniFund case makes that reality impossible to ignore.

If the purpose of regulation is to protect participants, then the current framework has failed. It has protected platforms, shielded borrowers, and abandoned lenders.

The question is no longer whether the regulation should be revised. It is whether the P2P model, as currently designed, deserves to survive at all.

Perhaps the time has come to admit what OJK itself seems to have realized. The problem is not the players. The problem is the game itself.

Source: 

• Decision of District Court of South Jakarta 160/Pdt.G/2024/PN Jkt.Sel