Riba in the Palm of the Hand: Online Lending in Aceh and the Territorial Limits of the Qanun on Islamic Financial Institutions

Qanun of Aceh No. 11 of 2018 on Islamic Financial Institutions (Qanun LKS) requires all financial institutions operating in Aceh to apply sharia principles, and in 2021 conventional banks closed or converted their offices in the province. Nevertheless, online lending (pinjol or pindar), most of which is conventional, remains accessible to Acehnese residents through their mobile phones. This article analyses why Indonesia's most formal sharia finance regime does not reach digital credit. The study adopts a socio-legal approach that combines doctrinal analysis of the Qanun LKS, OJK Regulation No. 40 of 2024, and the Law on the Governing of Aceh, with descriptive statistics from OJK data and case studies of the bank conversion, the 2023 debate on revising the qanun, and industry responses, framed by internet jurisdiction theory and contemporary critiques of riba. The findings show three things. First, outstanding online loans to borrowers with Aceh identity rose from IDR 107 billion (May 2022) to IDR 178 billion (November 2024) and were reported at IDR 195.67 billion (August 2025), even though sharia-compliant platforms hold only about 2% of the national market and Aceh records the highest sharia financial inclusion index in Indonesia (72.76%). Second, the Qanun LKS regulates sharia fintech, but its binding force rests on institutions "operating in Aceh"; it says nothing about where an electronic contract is concluded, and it leaves supervision to the OJK, whose licences are national. Third, political attention after 2021 focused on bank offices, while the industry states that Aceh identity carries no exemption. The article terms this "office-based sharia". It shifts the debate from enforcement effectiveness to the conceptual limits of sharia jurisdiction in digital space, and proposes an institutional route through the Aceh Sharia Council and coordination with the OJK.