he Financial Services Authority (OJK) has unveiled a five-year venture capital (VC) road map with the aim of making the industry’s growth more sustainable and positioning it as a driver of wider economic activity.
VC will be the fourth financial service industry to be supervised on a risk-based basis after insurance, pension funds and finance companies.
The road map, issued on Tuesday and based on OJK Regulation 25/2023, puts VC firms into two categories depending on whether they provide more equity or more debt funding.
It also tightens capital requirements, requiring that VC corporations have at least Rp 50 billion (US$3.2 million), venture debt corporations Rp 25 billion and sharia-compliant venture capital firms Rp 10 billion.
The minimum capital rules were part of a broader plan to “develop and strengthen the VC industry,” OJK chairman Mahendra said at the launch event for the VC road map in Jakarta on Tuesday.
“Let’s keep building and expanding the venture capital sector,” Mahendra remarked, “but with [the OJK] in command, to ensure it aligns with our goals and so that the target numbers are met quickly.”
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The industry was experiencing conditions that were “too good to be true”, considering the cost of accessibility, he pointed out, until the macroeconomic conditions shifted to an environment of higher inflation and higher interest rates, requiring VC firms to reform their strategies.
