Why do people use P2P lending services? The role of AI literacy and green self identity

Abstract: This study aims to examine the legal culture in the practice of online lending (pinjol) services in Indonesia, particularly in ensuring a balance between business interests of service providers and consumer protection. The research question addressed is: how can challenges in legal culture help create a balance between consumer protection and business interests in online lending practices, especially concerning inhumane collection methods and the misuse of personal data by illegal lenders. This research employs a normative legal method with a conceptual and statutory approach. The data used are derived from primary legal sources such as the Indonesian Civil Code (KUH Perdata), the Consumer Protection Act, and Financial Services Authority Regulation No. 77/POJK.01/2016 on Information Technology-Based Lending Services, as well as secondary sources such as scholarly literature. The findings indicate that the weakness of legal culture among society and business actors is a key factor behind widespread violations by illegal online lenders. Collection practices involving intimidation and the unlawful dissemination of personal data not only breach positive law but also violate consumers' rights and inflict psychological distress. The study concludes that strengthening legal culture plays a critical role in reinforcing the effectiveness of existing legal norms. Therefore, firm law enforcement, the elimination of illegal lending services, and improvement in public legal literacy are essential to build a fair, safe, and sustainable digital financial ecosystem.Keywords: P2P Lending, Pinjol, Digital

This study aims to identify and analyze the key factors influencing the intention to use fintech peer-to-peer (P2P) lending services in Bandung City, addressing a significant area of financial technology adoption in emerging markets. This research uses a quantitative accidental sampling method, namely a non-probability sampling technique to survey 428 residents of Bandung City who use P2P lending services. Data were collected through questionnaires and analyzed using multiple linear regression to evaluate the impact of various independent variables on usage intention. The analysis revealed that Personalization, Accessibility, and Enhanced Effectiveness have a positive and statistically significant influence on the intention to use P2P lending. Conversely, Loan Approval Speed demonstrated a negative and statistically significant effect. Social Factors, however, were found to have no significant impact on usage intention. These findings contribute to the literature on fintech adoption, highlighting the importance of service personalization and accessibility while identifying areas for improvement, such as streamlining loan approval processes. The insights provided can inform strategies for both service providers and policymakers in fostering responsible P2P lending adoption in Bandung City. This research underscores critical determinants of P2P lending usage intentions and provides actionable insights for enhancing the effectiveness and appeal of financial technology services in Bandung City.

P2P lending, commonly called online lending, is a service provider institution that provides borrowing and lending services in rupiah currency through an electronic system. The growth of P2P lending has increased rapidly since the pandemic of COVID-19 and led to an increase in the number of borrowers. Meanwhile, crime has also increased as many people can’t repay their loans. The chain of P2P lending must be controlled to suppress the growth of the population of people with online loans. This study constructs two P2P lending models by modifying the Kermack-McKendrick Epidemic Model. The population is divided into three sub populations: potential individuals, borrowers, and payers. Optimal control is used to suppress the population growth of borrower individuals through socialization with potential individuals or people with work potential and providing payment assistance for borrowers. This study constructs several optimal control scenarios for the two P2P lending models. From the comparison of optimal control scenarios, the optimal control recommendations that can suppress the population growth of borrower is to provide socialization to people with work potential and payment assistance for the borrower population.

The development of financial technology (fintech) has changed the way MSMEs conduct transactions while opening up wider access to financing. This study aims to analyze the effect of fintech on the income of MSMEs in Tugumulyo District, with fintech proxied by the use of peer-to-peer (P2P) lending services and the Indonesian Standard Quick Response Code (QRIS). This study uses a quantitative approach with a causal design. Primary data were collected through questionnaires distributed to 70 MSME owners who have adopted at least one fintech service. Data analysis techniques were performed using multiple linear regression, accompanied by classical assumption tests, simultaneous tests (F-tests), partial tests (t-tests), and determination coefficients. The results of the study indicate that P2P lending and QRIS together have a significant effect on MSME income. Meanwhile, in part, P2P lending has been proven to have a positive and significant effect on MSME income, suggesting that digital-based financing access enhances capital capacity and business activities. QRIS also shows a positive and significant effect on MSME income, reflecting improved transaction efficiency and payment convenience for consumers. These findings confirm the strategic role of fintech adoption in increasing MSME income through operational efficiency and inclusive financial access. These findings contribute empirical evidence to the literature by highlighting the role of fintech in improving MSME income within a semi-rural context, which remains underexplored in prior studies.

The purpose of this study is to determine the factors that influence the continuous intention to use Financial Technology Peer to Peer (P2P) lending services during the Covid-19 pandemic. P2P lending is the provision of financial services to bring together loan recipients and lenders in order to enter into lending and borrowing agreements directly through an electronic system using the internet network in the rupiah currency. The existence of financial technology today will encourage the growth of a cashless society. Banknotes or physical cash are created by utilizing resources in the environment and also the impact of creating banknotes is high and is a risk to the environment. The cashless system is expected to help minimize the environmental impacts of banknote printing waste that can cause climate change. This study is quantitative research using an online survey method. We screened the questionnaire that had been filled by 67 respondents and we choose 55 respondents who met the requirements. We analyzed the data with a structural equation model (SEM) to test the hypotheses, including the relationships of all latent variables. In this study, we use 6 variables perceived usefulness, personal innovativeness, perceived ease of use, social influence, perceived security, and continuous intention to use. The results reveal that perceived ease of use and perceived security have significant influence on continuous intention to use P2P lending services. In addition, personal innovativeness, perceived usefulness and social influence have no significant influence on continuous intention to use P2P lending services.

Background: Since 2016, the Securities Commission (SC) in Malaysia has given licenses to only eleven P2P lending platforms. Such lending platforms are expected to disrupt the lending services of traditional lenders in the coming years. However, being still in their infant stages, it is essential to know the extent to which such platforms are made known to potential investors out there. This study aims to examine the awareness level of the eleven P2P lending platforms among Malaysian adults. The study also explores if past investment experience and financial knowledge would influence such awareness from Malaysian adults.Methods: A sample of 335 Malaysian individuals was used for this study. An online questionnaire was designed with three main parts: demographic, financial literacy, and P2P lending awareness. Using IBM SPSS Statistics 26, frequency, descriptive, normality, Pearson coefficients and multiple regression analyses were carried out. Results: Although seven out of ten respondents have good knowledge in three areas of finance: compounding rate, inflation and diversification, only 14.33% had a good and excellent awareness level of P2P lending. Thus, one would expect lesser awareness about P2P lending among Malaysian adults whose financial literacy is poor or zero. Test results from multiple regression analysis suggest that past lending experiences positively affect the awareness of P2P lending in Malaysia, but not the financial literacy.Conclusions: The awareness about P2P lending among Malaysian adults is too low, despite their high level of education and financial literacy. No investing experience and not knowing any existing P2P lending in the country may be the reason for this low awareness. Therefore, for P2P lending to thrive in Malaysia, the eleven P2P lending platforms need to be promoted aggressively in various social media outlets.

Background - Since 2016, the Securities Commission (SC) in Malaysia has given licenses to only eleven P2P lending platforms. Such lending platforms are expected to disrupt the lending services of traditional lenders in the coming years. However, being still in their infant stages, it is essential to know the extent to which such platforms are made known to potential investors out there. This study aims to examine the awareness level of the eleven P2P lending platforms among Malaysian adults. The study also explores if past investment experience and financial knowledge would influence such awareness from Malaysian adults. Methods - A sample of 335 Malaysian individuals was used for this study. An online questionnaire was designed with three main parts: demographic, financial literacy, and P2P lending awareness. Using IBM SPSS Statistics 26, frequency, descriptive, normality, Pearson coefficients and multiple regression analyses were carried out. Results - Although seven out of ten respondents have good knowledge in three areas of finance: compounding rate, inflation and diversification, only 14.33% had a good and excellent awareness level of P2P lending. Thus, one would expect lesser awareness about P2P lending among Malaysian adults whose financial literacy is poor or zero. Test results from multiple regression analysis suggest that past lending experiences positively affect the awareness of P2P lending in Malaysia, but not the financial literacy. Conclusions - the awareness about P2P lending among Malaysian adults is too low, despite their high level of education and financial literacy. No investing experience and not knowing any existing P2P lending in the country may be the reason for this low awareness. Therefore, for P2P lending to thrive in Malaysia, the eleven P2P lending platforms need to be promoted aggressively in various social media outlets.

Background: Since 2016, the Securities Commission (SC) in Malaysia has given licenses to only eleven P2P lending platforms. Such lending platforms are expected to disrupt the lending services of traditional lenders in the coming years. However, being still in their infant stages, it is essential to know the extent to which such platforms are made known to potential investors out there. This study aims to examine the awareness level of the eleven P2P lending platforms among Malaysian adults. The study also explores if past investment experience and financial knowledge would influence such awareness from Malaysian adults. Methods:A sample of 335 Malaysian individuals was used for this study. An online questionnaire was designed with three main parts: demographic, financial literacy, and P2P lending awareness. Using IBM SPSS Statistics 26, frequency, descriptive, normality, Pearson coefficients and multiple regression analyses were carried out. Results: Although seven out of ten respondents have good knowledge in three areas of finance: compounding rate, inflation and diversification, only 14.33% had a good and excellent awareness level of P2P lending. Thus, one would expect lesser awareness about P2P lending among Malaysian adults whose financial literacy is poor or zero. Test results from multiple regression analysis suggest that past lending experiences positively affect the awareness of P2P lending in Malaysia, but not the financial literacy. Conclusions: The awareness about P2P lending among Malaysian adults is too low, despite their high level of education and financial literacy. No investing experience and not knowing any existing P2P lending in the country may be the reason for this low awareness. Therefore, for P2P lending to thrive in Malaysia, the eleven P2P lending platforms need to be promoted aggressively in various social media outlets.

This study aims to provide an overview of why people intent to use P2P lending by using a systematic literature review approach based on the results of previous studies that have been conducted by researchers on the Scopus database. This research uses qualitative methods and a literature study approach. The data source in this study was taken from the Scopus database with the keyword “peer-to-peer lending” OR “P2P lending” AND intention” with the publication year of 2011-2024. After applying a set of criteria, 68 articles were used in subsequent analyses. All selected articles are manually read and coded to get some identifiable information from each article. The information includes country setting, journal quality, research method, theories applied in research, and research findings. The reported results are discussed based on theme clusters using bibliometric analysis to classify articles based on the similarity of the authors keywords. Intention to use P2P lending is influenced by a combination of trust, risk perception, ease of use, personal innovativeness, and social factors. Trust and risk perception play an important role in shaping positive attitudes towards the platform, while factors such as ease of use and government support may influence intention indirectly. So future researchers can consider these factors in examining the intention to use P2P lending. This study relies on research in P2P lending literature in the Scopus database. Future studies can combine with the Web of Science database to expand generalization. Research related to Peer-to-Peer (P2P) Lending based on previous publications in the Scopus database shows that this topic is still relatively rare as the focus of academic studies. This indicates a great opportunity to fill the research gap in this field, especially to dig deeper into the motivations and factors that drive individuals intention to use P2P Lending services.

The P2P lending services industry is flourishing worldwide. The platforms effectively link the interests of borrowers and lenders together by the internet, and create significant value for both. This research based on the case study of America's largest P2P lending platform, Lending Club, to analyze how its business model to create value for the participants, and how to explore the market by platform strategy, and the competition and envelopment threat among P2P lending platforms. P2P lending utilizes “securitization “and” pre-set interest rates” business model to create a debt obligation trading platform between investors and borrowers. The mechanism can decrease participations’ risks by reducing information asymmetry. The platform allow participants to have an incentive to continue to use by reducing lender’s financing costs and increasing investor’s return on investment. Moreover, with the legality and legitimacy of the product, the platform attract new participants and institutional investors to join，and the investment from Google. These bring the positive signal effect for the whole industry, and accelerate the network effect. Due to its high barriers to entry, high brand loyalty, and profit margins diminishing features, P2P lending competition among enterprises appear monopoly, or “the winner takes all”. Moreover, P2P lending industry did not face the envelopment threat so far, but it does not rule out the possibility of future business acquisitions from other platforms. Based on P2P lending platforms have created a good business model, future research could be how to provide diversification products and international services. In term of Taiwan, the biggest barrier is lack of regulation openness and supervision mechanism, even the environmental is favorable for P2P lending. In the foreseeable future, the application of disintermediation and technology in the financial sector has continued to evolve, combined with application of internet and financial industry will be even more closely and comprehensively.

The challenge of accessing capital for Micro, Small, and Medium Enterprises (MSMEs), compounded by low financial literacy, has led to limited awareness among MSME actors regarding sharia-based Peer-to-Peer (P2P) Lending. This study investigates the response of MSME actors on Sulawesi Island, Indonesia, to the adoption of fintech-based sharia P2P lending services using the AISAS (Attention, Interest, Search, Action, and Share) model. Distinct from previous research, this study specifically focuses on the utilization of sharia-based P2P fintech by MSMEs in Sulawesi, applying the AISAS model approach. A quantitative approach was employed, gathering data from 580 MSME respondents in Sulawesi, and analyzed using Smart-PLS 3.2.9 software. The results indicate that interest, search, and sharing behavior are significant predictors of sharia-compliant P2P lending adoption, while attention and action demonstrate no significant influence. This study offers valuable insights for sharia fintech P2P lending service providers and government bodies supporting MSMEs, particularly in Sulawesi, stressing the importance of enhancing outreach to promote sharia fintech P2P lending as a more accessible and efficient capital source.========================================================================================================ABSTRAK – Pendorong Adopsi P2P Lending Syariah di Indonesia: Pendekatan Model AISAS. Akses permodalan masih menjadi tantangan signifikan bagi Usaha Mikro, Kecil, dan Menengah (UMKM) di Indonesia. Hal ini dipicu oleh rendahnya literasi keuangan para pelaku usaha yang berakibat pada rendahnya kesadaran akan produk keuangan syariah seperti layanan Peer-to-Peer (P2P) Lending. Penelitian ini mengkaji adopsi layanan P2P Lending Syariah di kalangan UMKM di Pulau Sulawesi, Indonesia, dengan menggunakan model Attention, Interest, Search, Action, and Share (AISAS). Berbeda dengan penelitian sebelumnya, studi ini berfokus pada pemanfaatan fintech P2P berbasis syariah oleh pelaku UMKM di Pulau Sulawesi. Menggunakan pendekatan kuantitatif, penelitian ini mengumpulkan data dari 580 pelaku UMKM dan dianalisis menggunakan Smart-PLS 3.2.9. Hasil penelitian menunjukkan bahwa minat, pencarian, dan berbagi berpengaruh signifikan terhadap adopsi P2P Lending syariah, sementara perhatian dan tindakan menunjukkan hal sebaliknya. Hasil penelitian ini berkontribusi kepada penyedia layanan P2P dan instansi pemerintah dalam mendukung pertumbuhan UMKM, khususnya di Sulawesi. Temuan ini menyoroti perlunya sosialisasi yang terarah untuk mempromosikan P2P Lending syariah sebagai solusi pembiayaan yang mudah diakses dan efisien.

The Financial Technology peer to peer (P2P) lending concept still finds many weaknesses, especially in terms of legal protection for parties and risk management from Fintech itself. P2P Lending Regulation in Indonesia currently uses POJK No. 77 / POJK / 2016 concerning technology-based money lending and borrowing services. The position of Fintech P2P lending is similar to a bank, but the concept is a different agreement. Fintech P2P lending funds can come from investors or funders or cooperate with legal entities or banks. Considering that the risk posed by Fintech P2P lending is very large, Fintech must also implement consumer protection, risk management and prudential principles like a bank credit agreement so as to cover the risk of bad credit, the Fintech platform uses other means to protect funds from investors or investors. the other is with the protection fund as done by the Coin works platform. The protection fund does not cover the entire fund invested by the funder, depending on the availability of protection funds and the amount of credit that is experiencing congestion. The POJK regulation in article 19 describes the agreement clause which must contain the dispute resolution mechanism and the settlement mechanism if the implementation of lending and borrowing services is not able to continue operations, so that with the rules related to the clause it is expected that the funder will still get legal certainty and protection for funds.

The Financial Technology peer to peer (P2P) lending concept still finds many weaknesses, especially in terms of legal protection for parties and risk management from Fintech itself. P2P Lending Regulation in Indonesia currently uses POJK No. 77 / POJK / 2016 concerning technology-based money lending and borrowing services. The position of Fintech P2P lending is similar to a bank, but the concept is a different agreement. Fintech P2P lending funds can come from investors or funders or cooperate with legal entities or banks. Considering that the risk posed by Fintech P2P lending is very large, Fintech must also implement consumer protection, risk management and prudential principles like a bank credit agreement so as to cover the risk of bad credit, the Fintech platform uses other means to protect funds from investors or investors. the other is with the protection fund as done by the Coin works platform. The protection fund does not cover the entire fund invested by the funder, depending on the availability of protection funds and the amount of credit that is experiencing congestion. The POJK regulation in article 19 describes the agreement clause which must contain the dispute resolution mechanism and the settlement mechanism if the implementation of lending and borrowing services is not able to continue operations, so that with the rules related to the clause it is expected that the funder will still get legal certainty and protection for funds.

Micro, Small, and Medium Enterprises (MSME) is Indonesia’s main corporate sector, with 97% of Indonesia’s total workforce. Capital fulfillment is one of the obstacles to MSME’s development. While most Indonesian MSMEs have various weaknesses in meeting banking requirements for financing, technological developments in the financial services sector have created peer-to-peer (P2P) lending service providers. However, the existence of P2P lending is not perfect for MSME alternative lending in Indonesia, including Batam city. The study aims to analyze SMEs’ level of financial intelligence when using P2P lending as alternative lending. The location of this survey was Batam, with respondents from up to 150 SMEs in Batam. This study is related to data analysis techniques using the partial least squares (PLS) method using SmartPLS software version 3. The results show that the level of financial intelligence of MSME actors in Batam is still low to understand the benefits of P2P. Credit as an alternative. It can be used to raise funds to meet the business capital. This study concludes that MSMEs need to better understand peer-to-peer lending services as an alternative funding source for their capital sufficiency.

An alternative for Micro Small and Medium-Sized Enterprises (MSMEs) against the barriers of financial inclusion is peer-to-peer (P2P) lending services. Despite its effectiveness in advancing financial inclusion, the factors that influence its adoption among MSMEs are unique. The purpose of this study is to analyze the factors influencing the intention of Indonesia MSMEs to adopt P2P lending services using the unified theory of acceptance and use of technology (UTAUT) 2 model. The results of this study show that five variables significantly affect MSMEs including performance expectancy, social influence, price value hedonic motivation, and effort expectancy. Meanwhile, the result shows that the factors of facilitating conditions and habits were not significant. This study contributes a reflective insight on the determinants of the P2P lending adoption among MSMEs in a developing country.