Lombard loans in Indonesia.
Private, securities-backed credit against Indonesia-listed shares — pledged, not sold, with ownership retained.
A Lombard loan against Indonesia-listed shares is credit secured by a pledge of equity listed on the IDX. The holder pledges the shares as collateral, draws cash against a fraction of their market value, keeps beneficial ownership and dividends subject to structuring, and recovers the position in full on repayment. It is a loan against shares rather than a sale of them — the Geneva private-banking form of what is elsewhere called a share-backed loan. Known locally in some markets as “repo saham / gadai saham”, the instrument is the same: a loan secured by a pledge of listed shares.
- Lombard loans are arranged against shares listed on the IDX (IDX).
- The pledge is not a sale: ownership, dividends, and the upside stay with the holder.
- Loan-to-value is calibrated to the specific position, funded in IDR or cross-currency.
- Structured under the OJK regime, with disclosure from 5%.
Eligible collateral and venues
Lombard Financing arranges facilities against equity listed on the principal Indonesia venue: Indonesia Stock Exchange (Bursa Efek Indonesia) (IDX). Eligibility at the position level turns on the liquidity and free float of the specific line, its volatility, and the size of the holding relative to its typical traded volume — the same variables that drive the loan-to-value.
Regulator and disclosure
Shares listed in Indonesia are regulated by Otoritas Jasa Keuangan (OJK). Substantial-shareholding disclosure is triggered from 5%, and a pledge over a large line is structured with that reporting regime in view so that the transaction remains discreet and compliant. Where a holding sits near a control or takeover threshold, the structure is arranged to avoid disturbing the position.
Funding, custody, and structuring
Facilities are typically arranged for a tenor of twelve to thirty-six months, funded in IDR or in another currency on a cross-currency basis. Throughout the facility the pledged shares are held by a qualified custodian under bankruptcy-remote arrangements, so the security is clean and the holder’s ownership is preserved. Non-recourse, limited-recourse, and full-recourse structures are available, and the choice interacts with the loan-to-value and the pricing. One distinction is worth drawing at the outset: this is not a stock loan in the securities-lending sense, where title passes to a borrower who may on-lend or short the line. Here the shares are pledged and remain the holder’s throughout, as the comparison of Lombard, margin, and stock-loan structures sets out.
| Listing venue(s) | Indonesia Stock Exchange (Bursa Efek Indonesia) (IDX) |
|---|---|
| Regulator | Otoritas Jasa Keuangan (OJK) |
| Currency | IDR (cross-currency available) |
| Disclosure threshold | From 5% substantial-holding disclosure |
| Principal indices | Jakarta Composite Index (IHSG), LQ45, IDX30 |
| Indicative tenor | 12–36 months, renewable by agreement |
| Recourse | Non-recourse / limited-recourse / full-recourse |
Detail by listing venue
Each venue has a page of its own, setting out how securities-backed credit is arranged against shares admitted there — the disclosure regime, the settlement and custody chain, the eligible segments, and the currency in which a loan against shares is normally drawn.
- Lombard loans against IDX-listed shares — Indonesia Stock Exchange (Bursa Efek Indonesia), Jakarta. OJK-regulated, with disclosure from 5%; indices Jakarta Composite Index (IHSG), LQ45, IDX30.
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On this market, specifically.
The market and its listed universe
The Indonesia Stock Exchange — Bursa Efek Indonesia, formed in 2007 from the merger of the Jakarta and Surabaya exchanges — is the country’s single venue. The IDX Composite, the IHSG, covers the whole board, with LQ45, IDX30 and IDX80 isolating the liquid end and the Jakarta Islamic Index tracking Shariah-screened lines. Listings are segmented across Main, Development, Acceleration, New Economy and Watchlist boards. Capitalisation clusters in the large private and state-owned banks, telecommunications, consumer staples, coal and nickel. Ownership is heavily concentrated: many issuers were floated with modest public tranches by conglomerate families, and the state retains controlling stakes in the biggest banks and utilities, so the tradeable float behind a headline capitalisation is frequently much thinner than it looks.
Who borrows against listed shares here
Two blocks dominate the register. The state is the controlling shareholder of the largest listed banks, the telecom incumbent, and energy and construction companies, held through the state-owned-enterprise framework and, since 2025, grouped under the Danantara state investment vehicle. Alongside it sit the conglomerate families — typically Chinese-Indonesian houses built through the 1970s and 1980s across tobacco, property, agribusiness, coal and banking — who floated minority tranches while keeping control, often through layered holding companies including offshore ones. Those families are the natural users of share-backed financing: they need capital for a new mine, a property project, a group refinancing or a generational handover, and a visible sell-down of a control block in a market this closely watched carries a signalling cost they will not pay.
Disclosure and regulation
Indonesian-listed shares fall under Otoritas Jasa Keuangan, the financial services authority that absorbed the old capital-markets supervisor, working from the Capital Market Law of 1995 as substantially amended by the 2023 financial-sector law. Holders at five per cent and above are subject to disclosure, with further reporting on changes, and directors and commissioners report their own dealings. Two features shape a share-backed financing here. Foreign-ownership ceilings apply in regulated sectors such as banking, and they constrain who may lawfully come to hold shares if security is ever enforced. And the local market draws a sharp line between a pledge, which leaves ownership with the holder, and repo saham, a sale with a repurchase agreement in which title actually passes — a distinction worth settling in the documents.
The legal form of the security
Indonesia is a civil-law jurisdiction. Security over shares is taken either as gadai — the pledge under Articles 1150 and following of the Indonesian Civil Code — or as fidusia, the fiduciary transfer of title under Law No. 42 of 1999, which is perfected by registration with the Fiduciary Registration Office under the Ministry of Law. Company Law No. 40 of 2007 contemplates both over shares in a limited liability company, requires the encumbrance to be recorded in the shareholder register, and leaves voting rights with the pledgor. Enforcement deserves attention: the Constitutional Court’s 2020 ruling on fiduciary security narrowed unilateral self-help execution where default is disputed, so how a financier would actually realise the collateral, and on what evidence of default, is the central question for Indonesian counsel.
Custody and how security is taken
Indonesian listed shares are scripless and held in collective custody at Kustodian Sentral Efek Indonesia, the central depository, whose C-BEST platform carries book-entry settlement while KPEI acts as clearing guarantor. Investors hold through a securities account with a custodian bank or broker and are identified by a Single Investor Identification number, with sub-accounts and the AKSes facility letting a beneficial holder verify its own balances directly with the depository. Exchange trades settle by book entry on a T+2 cycle. Security over pledged securities is therefore worked through the depository rather than over certificates: the line is blocked or moved into a designated pledge sub-account with the custodian instructed accordingly, and the encumbrance is recorded in the issuer’s shareholder register.
Currency and cross-border considerations
The rupiah is convertible and Indonesia does not operate a general exchange-control regime, so dividends, sale proceeds and loan repayments may be remitted offshore; Bank Indonesia relies on reporting and prudential rules instead. Two of those matter here. Bank Indonesia restricts rupiah transactions with foreign parties absent an underlying economic purpose and requires rupiah to be used for domestic transactions, which limits any offshore IDR leg. And foreign-currency borrowing by non-bank corporates sits inside a prudential framework covering hedging, liquidity and credit standing, alongside external-debt reporting. Rules on retaining export proceeds from natural resources have also been tightened. Whether a given loan against listed shares is caught, and what reporting follows, should be settled with an onshore bank before drawdown.
Tax questions to put to your adviser
Put these to an Indonesian tax adviser. Sales of listed shares executed on the exchange attract a final tax on gross proceeds rather than tax on the net gain, with an additional charge historically applied to founder shares at listing — ask how that would fall if collateral were ever sold, and who bears it. Ask whether creating a gadai or a fidusia is itself a transfer for tax purposes, and whether moving the line into a financier’s nominee changes the answer. Ask about withholding on dividends and on interest paid offshore, and what treaty relief requires by way of a certificate of domicile, which Indonesia applies strictly. Stamp duty here is a nominal document levy rather than an ad valorem transfer tax, but confirm which documents attract it.
General information only — not tax advice. Treatment turns on your own circumstances and residence, and on law that changes.
An illustrative example
Consider a founding family’s stake in an LQ45 constituent — a coal or nickel producer, a consumer-goods company or a bank of the kind that leads the index. Selling would cut the family’s percentage in a company that carries the group’s name, and in a market where large blocks are closely watched it would be read as a verdict on the business. Borrowing against the shares instead leaves ownership, board representation and dividends where they are, while releasing cash for a new mine, a property development or a generational transfer. The line is blocked in the depository, the encumbrance is noted in the shareholder register, and the sector’s foreign-ownership position is checked before drawdown. On repayment the security is lifted.
Illustrative only — not an offer, a quotation, or a commitment to lend.