Strenghtening Financial Technology Regulations through Securities Crowdfunding Service as Alternative Means to Indonesian MSEs Financing

Abstract

Micro, Small and Medium Enterprises (MSMEs) hold a crucial role and contribution in supporting the national economy. However, access to sources of MSMEs financing for business development is often constrained by several factors, one of which is the result of an assessment that is deemed to have less bankability. A number of innovations were carried out to overcome this problem. One of which is the use of fintech through the development of Securities Crowdfunding services as an alternative financing for MSEs in Indonesia. This research uses a normative juridical method with a statutory and conceptual approach. The results of this study indicate that POJK No.57/POJK.04/2020 and its amendments have filled the legal void in the capital market in accommodating the provision of Securities Crowdfunding services. However, the regulation still contains loopholes, particularly in relation to the potential risk for investors in investing activities due to the information asymmetry between investors and issuers. Therefore, it is necessary to make a push in overcoming this problem with a new mechanism by using a confidentiality agreement which is bridged by the service provider to ensure the protection of interests of the parties.