Fintech Finance Research Articles

Strengthening Micro and Small-scale Enterprises' (MSE's) Resilience and Adaptability to Accelerate Economic Recovery Post-Covid-19 Pandemic in Indonesia

The Corona Virus Disease 2019 (COVID-19) outbreak 2020 opened a new discourse that a global health disaster could trigger an economic crisis. For Indonesia, this crisis was marked by a significant decline in economic activity in almost all sectors, so gross domestic product (GDP) growth was corrected to –2.19%. COVID-19 has had a tangible impact on the decline in the performance of MSMEs. In responding to the global crisis caused by COVID-19, MSMEs must have a crisis management strategy. Efforts to strengthen the resilience of MSMEs amidst the uncertainty caused by the COVID-19 pandemic require external support, especially from the government. This research generally aims to improve the strength and adaptive capacity of MSEs to accelerate economic recovery after the COVID-19 pandemic. From the results of the analysis, fintech financing has a significant influence on capital productivity. If fintech sets high interest rates, it will have an impact on reducing MSEs’ capital productivity. The value of loans during the pandemic era for access to online loans has the potential to strengthen the resilience of MSEs from the pressures of the economic crisis. The suitability of the loan value to business needs shows that MSEs whose fintech loans match business needs will be able to increase capital productivity compared to MSEs with unsuitable fintech loans, and the usefulness of fintech loans means that fintech has a positive impact on MSEs’ capital productivity by looking at its effectiveness. Keywords: SMEs, financial technology, capital, productivity

Financial literacy and FinTech market growth around the world

Leveraging new data on fintech financing from the Bank of International Settlements, this study establishes a strong, positive association between financial literacy and the growth of the FinTech market across 114 countries from 2013 to 2019. We construct a new education policy-based measure of financial literacy based on the extent to which financial education is planned and subsequently integrated in public education curricula, using data from the World Bank's Global Financial Inclusion and Consumer Protection Survey. Additionally, we use the Standard and Poor's Global Financial Literacy Survey to obtain a market-based measure of financial literacy reflecting individuals' financial knowledge. We identify nonlinear effects within this relationship. This correlation between financial literacy and FinTech market growth remained consistent in varying economic, technological, and institutional contexts, validated through rigorous sensitivity tests and endogeneity analysis. The results imply that higher levels of financial literacy within a population could serve as a catalyst for expanding the FinTech market, underscoring the key role of financial knowledge in fostering the adoption and utilization of FinTech products and services thereby providing useful policy directions.

Fintech and financial stability: Evidence from spatial analysis for 25 countries

Fintech has experienced rapid advances in recent years. This study examines the impact of Fintech on financial stability for a group of 25 countries during 2013–2020. We adopt the novel Fintech-enabled financing volume to directly measure Fintech development. We utilise both the aggregate and disaggregated level of Fintech financing; the latter includes crowdfunding, business lending and consumer lending, each has a different funding process and default rates. We account for spatial dependence in financial stability across countries by employing various spatial models. Our findings first reveal that there is positive spatial dependence of financial stability across countries. It implies that financial stability has a positive spillover to neighbouring countries and validates the necessity of spatial analysis. Second, based on the Spatial Durbin Model which best describes our data, Fintech financing makes a positive local and cross-border contribution towards financial stability, irrespective of alternative weight matrices and sample sizes. Such positive impact is more profound in countries with smaller sizes of Fintech financing volume, and the cross-border effect is stronger with closer geographic proximity. Finally, crowdfunding enhances financial stability, whilst consumer lending has a contrasting destabilising effect.

BigTech, FinTech, and banks: A tangle or unity?

We examined the dual impact of BigTech and FinTech financing on traditional banking metrics like personal loans, credit risk, and bank performance. Through baseline regressions, alternative measures, endogeneity checks, and sub-sample analysis, our findings reveal an inverse relationship between BigTech and FinTech financing with personal loans and credit risk, suggesting severe challenges to traditional banking practices. Conversely, a positive correlation with bank performance indicates that while BigTech and FinTech disrupt certain aspects of banking, they also present opportunities for adaptation to blockchain-based financing mechanisms. Further evidence also confirmed these findings. The study informs various policymakers, stakeholder, and academic scholars.

SMEs fintech financing: does board governance matter?

The purpose of this study is to examine the board governance factors that influence a small and medium enterprise’s (SME’s) decision toward fintech financing. A structured questionnaire survey of 90 Malaysian SMEs was used and the data analyzed using the Heckman selection model and the marginal effect model. The results demonstrate that SMEs’ female board members, family board members, and the duality of their CEOs have a significant influence on their decision to obtain financing from fintech platforms. Professional services provided by experts have a negative influence on their decisions to engage in fintech financing. The SMEs’ board size, the length of their chairmen’s service, and non-family board members are negatively related to their decisions to apply for financing. The more male members that were on the board, the more likely the SME was to choose to apply for external financing during the survey year.

Application of 5C Principles in Fintech Financing Agreements Reviewed according to Indonesian Positive Law

This research aims to analyze form of regulation of the 5C principles in Fintech financing according to applicable positive law. To analyze the form of legal protection for customers who carry out fintech financing. By using normative legal research methods. Research results The form of regulation of the 5C principles in Fintech financing according to applicable positive law is contained in various regulations consisting of Article 29 paragraphs 2, 3 and 4 of Law no. 10 of 1998, Article 26 paragraph (1) of the ITE Law, Bank Indonesia Regulation no. 13/25/PBI/2011 concerning Prudential Principles for Commercial Banks, Bank Indonesia Regulation Number 14/2/PBI/2012 concerning the Implementation of Card Payment Instruments, Bank Indonesia Regulation Number 19/12/PBI/2017 concerning the Implementation of Financial Technology, Financial Services Authority Regulation no. 77/POJK.01/2016 concerning Information Technology-Based Lending and Borrowing Services, and Financial Services Authority Regulation Number 37/POJK.04/2018 concerning Crowdfunding Services Through Information Technology-Based Share Offerings ( Equity Crowdfunding) . Forms of legal protection for customers who carry out fintech financing. There are two forms of legal protection, namely preventive legal protection consisting of legal protection for users of fintech services, especially online lending and borrowing. Before a dispute occurs, preventive measures can be taken by the lending and borrowing service providers. online based. The organizer's efforts before a dispute occurs are to apply the basic principles of legal protection for service users. These principles are regulated in Article 29 POJK Number 77/POJK.01/2016 concerning Online Money Lending and Borrowing Services, including the principles of transparency, fair treatment, reliability, success and data security, and simple, fast, user dispute resolution. and affordable costs and means of repressive legal protection, to resolve disputes that have occurred. This legal protection can only be implemented after a dispute arises, such as administrative sanctions and criminal sanctions if there is negligence committed by the Fintech institution. Disputes in online money lending and borrowing services can occur between users and other users or between users and service providers.

Examining the Role of FinTech Services on Customers Retention of Islamic Banks in Pakistan: An Empirical Assessment

The objective of this research is to examine the influence of several variables, such as fintech payments, advisory services, and fin-tech financing, on the retention of customers in Islamic banks. The researcher used quantitative research design and positivistam philosophy to conduct this research. The target population comprises Islamic banking customers, with the sample drawn from 300 individuals holding accounts in the Punjab province of Pakistan. Data collection was facilitated through an adopted questionnaire administered to respondents. The findings reveal a significant impact of FinTech Payments, Advisory Services, and FinTech Financing on customer retention within the Islamic banking industry, showcasing the importance of these elements in shaping customer loyalty. This study stands out for its comprehensive examination of various facets related to FinTech and their direct and indirect effects on customer retention within the unique context of Islamic banking. However, it's crucial to acknowledge a limitation regarding the generalizability of the results beyond the studied population. Despite this constraint, the research offers valuable insights for Islamic financial institutions aiming to bolster customer retention through strategic utilization of FinTech-related elements and the cultivation of trust among their clientele. By embracing these findings, Islamic banks can enhance their customer relationship management strategies and maintain a competitive edge in the evolving financial landscape.

Leveraging blockchain for industry funding: A social media analysis

The progress in industrial and corporate blockchain technology, particularly the pioneering fintech financing methods rooted in blockchain like Initial Coin Offerings (ICOs) and Security Token Offerings (STOs), has the potential to disrupt across industries. These innovations offer creative solutions to address longstanding challenges. However, the novelty of these concepts has given rise to issues related to information asymmetry among investors, exacerbated by the opinions shared on social media platforms. To comprehensively analyse the trends of these technologies and their societal impact, as well as their influence on the contemporary business landscape, we conducted a study in the social platforms X (formerly known as Twitter) analysing 59,453 tweets using natural language processing (NLP). Through this research, we have identified key topics such as investment security or corporate challenges that provide valuable insights and structured information essential for industry stakeholders. In summary, this study explores the dynamic interplay between blockchain technology, ICOs, STOs and social media in the industry. It sheds light on the sentiment and implications of the use of this technology and these emerging financial models, offering a nuanced understanding of their impact on the market. Thus, the idea that user opinions play a crucial role in influencing decisions is supported, and their impact can fluctuate depending on the changing dynamics of the market.

Konstruksi Perjanjian Finansial Teknologi Pembiayaan Multiguna Shopee Pay Later Pada E-Commerce Shopee Indonesia

The convenience provided by online loans has a risk if the debtor fails to pay, especially since there is no guarantee in this online loan system. This, of course, will be disastrous for creditors. Shopee Pay Later, one of the marketplace-based online loan providers from the Shopee application, provides loans for users through the distribution of multipurpose financing online without collateral. This research uses a normative-juridical method. The SPayLater multipurpose financing agreement, literature studies, and laws and regulations are the data sources. Conceptual and statutory approaches become the basis for further qualitative analysis, which is explained descriptively and analytically so as to obtain systematic results and conclusions related to the problems studied. Based on the findings of this research, the P2PL fintech financing agreement has been legally regulated in Financial Services Authority Regulation No. 10/POJK. 05/2022 concerning information technology-based money lending and borrowing services (LPBBTI). The SPayLater multipurpose financing agreement has been made in accordance with applicable legal provisions and fulfils the legal requirements of the agreement. This financing agreement forms a legal relationship between the creditor and the debtor. The service provider only acts as an intermediary for the creditor in selecting prospective debtors and resolving disputes internally so that the parties can immediately fulfil their respective obligations.

The role of Fintech financing in correcting ecological problems caused by mineral resources: Testing the novel ecological deficit hypothesis

Mineral resource-abundant nations encounter different forms of ecological problems which necessitate these nations to come up with credible solutions. Hence, this study empirically explores how Fintech development affects the ecological statuses of leading mineral-exporting nations, in light of a novel ecological deficit hypothesis. In this regard, advanced panel data estimation methods that are adept in handling issues related to cross-sectional dependence, heterogeneous slope coefficients, and endogenous covariates are employed for analytical purposes. Overall, the findings obtained from the analysis highlight the importance of persistently scaling credit extensions to Fintech startup-based projects for ultimately shrinking the initial ecological deficit-widening impacts of Fintech development. Accordingly, the validity of the ecological deficit hypothesis is verified by the inverted U-shaped nexus between Fintech credits and ecological deficits. In addition, the mineral sector expansion-led deterioration in the ecological status is affirmed by the findings. Moreover, the pollution haven hypothesis in the context of ecological deficits is found to be valid while urbanization is observed to deteriorate the extent of ecological deficits in the selected mineral-exporting nations. Furthermore, the robustness of these findings is confirmed in most cases when ecological footprint and biocapacity are considered as the outcome variable instead of ecological deficits. In line with these key findings, it is deemed necessary for the concerned mineral-exporting nations to not only amplify their level of Fintech credit extensions but also increase its share of their respective national output levels. Besides, greening future mineral sector expansion-related policies is essential in further reducing the ecological deficits. Furthermore, attracting ecologically friendly foreign direct investments and adopting sustainable urbanization mechanisms should be considered by these mineral-exporting nations to become ecologically surplus in the future.

The Role of Fintech in Promoting the Takaful Model of Islamic Insurance

This study examines the influence of fintech integration on the Takaful insurance business in Qatar, emphasizing profitability and industry development. Takaful, an Islamic insurance policy based on ethical values, faces practical difficulties. Fintech, driven by technical breakthroughs such as blockchain and AI, provides solutions to simplify processes and improve accessibility. To get quantitative data, 320 Takaful and fintech experts were polled. Respondents had a wide range of expertise levels, emphasizing the importance of industry collaboration. Positive opinions of regulatory support (85.9%) and proactive fintech uptake (84.1%) were noted. Regulatory barriers (82.5%), cybersecurity concerns (82.2%), opposition to change (82.8%), and a lack of fintech financing (82.5%) were among the challenges. The study discovered that Fintech plays a substantial role in increasing profitability, with 91.3% reporting greater earnings and 84.4% reporting enhanced operational efficiency. Personalized insurance solutions (84.4%) and data-driven growth (88.1%) generated profitability. Fintech was largely viewed as supporting the Takaful insurance sector (83.4%), increasing client involvement (81.9%) and confidence. Correlation and regression analysis demonstrated the existence of favorable relationships between fintech integration, its problems, profitability, and industry promotion. These studies highlight Fintech’s transformational potential and inform industry stakeholders and policymakers. Addressing regulatory, cybersecurity, change resistance, and finance issues is critical to effectively integrating Fintech into Qatar’s Takaful insurance.

Analisis Pertumbuhan Fintech Sebelum dan Saat Pandemi Covid-19 di Indonesia

Fintech in development has fluctuations in every sentiment, both negative and positive and has had an impact on its development. Before the Covid-19 pandemic occurred, many people still use traditional financial services which were carried out through offline payment transactions and carrying cash even though fintech options were available. During the Covid-19 pandemic occurred, financial services changed offline habits into online activities. However, inconsistencies occurred between loan disbursement which increased while the interest trend in fintech financing decreased when the Covid-19 pandemic hit. The purpose of this study is to analyze whether there were differences before and during the Covid-19 pandemic among fintech lenders in Indonesia. analyze whether there were differences before and during the Covid-19 pandemic for fintech borrowers in Indonesia. The data used is transaction data of fintech lenders and borrowers in Indonesia from 2018 – 2022. This study uses the Paired Sample t-Test and the Wilcoxon Test with the Eviews 12 test tool. The results of this study indicate that there are significant differences in lender transactions and borrowers in conditions before the entry of Covid-19 to the time of entry of Covid-19 to Indonesia. The conclusion is that this significant difference is because during Covid-19, especially investors in Indonesia experienced many problems from health to finance, so when Covid-19 occurred they held back money more than investing in fintech so that lender transactions decreased. In borrower transactions due to lender transactions as lenders decreasing so that loan requests by borrowers that can be fulfilled also decrease.

Malaysian SMEs’ Strategic Orientation and Access to Fintech Financing: Moderated by Entrepreneurial Innovativeness

With the advent of Fintech financing, innovativeness plays a significant role in enhancing Small and medium-sized enterprises' (SMEs) access to financing. Three comprehensive constructs, namely, market orientation, learning orientation and technology orientation, are adopted to present a holistic picture of the effect of strategic orientation on Malaysian SMEs’ access to Fintech financing, moderated by entrepreneurial innovativeness. This study adopted a survey research design based on 221 Malaysian SMEs. The results indicate that strategic orientation influence SMEs’ access to Fintech financing. However, the moderating impact of entrepreneurial innovativeness is insignificant in the relationship between strategic orientation and access to Fintech financing. Technological innovation is re-shaping commerce and the economy across all sectors. SMEs need to access external sources of information, knowledge, expertise and technology in order to build their own innovative capability for accessi

The Rise of Financial Technology and Its Credit Risk in Indonesia

The purpose of the study is to use VECM to examine credit risk, basic loan interest rate, the number of lending entities, and the total amount of outstanding loans for fintech companies. Fintech is expanding quickly in Indonesia even during the Covid 19 pandemic. Since March 2019 until the present, Indonesia has formally entered the Covid 19 epidemic, causing Indonesia's GDP growth in 2020 to be -2.07. However, the amount of outstanding fintech loans in Indonesia is still sharply rising. Numerous financial services are offered by fintech businesses, and they can connect with the unbanked. Because a fintech firm tries to offer ease, particularly for customers who have trouble accessing traditional banks, credit through a fintech company is an easy loan to approve. Profit and credit risk are increased for fintech enterprises. As a result, interest rates have a short-term influence on outstanding loans because fintech lending companies derive revenue from activities and services based on fees and interest. Fintech financing has extremely minimal credit risk, is below OJK's criteria, and has no immediate or long-term effects on outstanding loans. Long-term outstanding loans to fintech companies are greatly impacted by the number of lender entities.

FinTech finance and social-environmental performance around the world

We examine the influence of the country-level value of FinTech finance on social-environmental performance across 58 countries during the period of 2013–2019. Our analysis incorporates additional economic, institutional, and social factors to capture the multifaceted nature of the effect. Our findings reveal a small yet statistically significant positive impact of FinTech finance on social-environmental performance. This effect remains robust across various measures and estimation methods, as well as through sensitivity and endogeneity analyses. While we do not observe nonlinear effects, we do identify lagged effects. Our study contributes to the limited existing literature by utilizing a large sample of countries and employing aggregate values of FinTech finance to predict long-term social-environmental performance. As a result, our findings hold implications for policy considerations.

Fintech As A Financing Solution For Micro, Small and Medium Enterprises

In 2020, more than 50 new fintech enterprises were formed, these financial businesses competing with the other 140s of startups that had previously been in the Indonesian financial scene. The fintech business in Indonesia has become a prima donna, attracting a lot of attention from financial industry players. Fintech startup investment has sparked a lot of interest, and several startups have even received series A funding this year. Fintech is only getting started, and there are a lot of new products coming out. In the interim, the Service of Cooperatives and Little and Medium Organizations (Service of Little and Medium Endeavors) has sent off 3.81 million miniature, little, and medium undertakings (SMEs) that are now utilizing a web-based stage to advertise their items. This records for around 8% of Indonesia's complete 58.9 million little and medium-sized organizations. The lack of access to capital is a long-standing issue that has hampered the growth of SMEs that do not have access to bank finance. SMEs are unable to create innovations to enhance output due to a lack of financial resources. However, the increasing expansion of fintech financing businesses, such as peer-to-peer lending, has opened up another option for loan funders. Peer-to-peer lending is a type of lending that focuses on the medium and lower market segments.

Criminal Victimization: Women and Fintech Financing from the Theory of Lifestyle Exposure

Women in the digital era are one of the most vulnerable parties to become victims. Not only as victims of physical violence but also users who have the highest number. There are various reasons why women are currently very active in using various digital platforms or applications on the market, one of which is online loan applications (financial technology). They use the application for various purposes, such as to meet personal basic needs, finance household life, to buy trending goods that are expensive. In the end, because these various goals caused new problems for them, namely debts with high interest accompanied by various threats from irresponsible parties. This article was written using a normative method that aims to review the extent to which the role of women who are victims of the rise of various fintechs, both licensed and illegal in terms of victimology. Here it can be seen that women have a role in the occurrence of financing agreements through Fintech, although the role of women has a passive tendency, but women have a role in the occurrence of fintech financing agreements which ultimately lead to digging holes, closing the hole from the loans they have received. In addition to these problems, women based on the theory of lifestyle exposure are also at risk of becoming victims of immoral crimes in digital media when they are bound by fintech financing agreements in the form of distributing the identity and personal photos of the victims.

PENGARUH PEMBIAYAAN FINTECH SYARIAH TERHADAP MODAL KERJA, OMZET PENJUALAN, DAN LABA BERSIH UKM (STUDI PADA ALAMI SHARIA)

The presence of a number of fintech companies contributes to the development of Small and Medium Enterprises (UKM) in meeting their business capital needs. This answered an opinion which stated that SMEs have problems in accessing finance, one of which is the lack of access to formal sources of funds, either due to the absence of banks in remote areas or the unavailability of adequate information. There is so much potential for Islamic fintech financing that it deserves attention, but to this day there are still few scientific papers published to see whether Islamic fintech has a role in developing the financial performance of SMEs. Data analysis techniques and hypothesis testing in this study used the SmartPLS program. There is sufficient evidence that financing measures can improve the financial performance of SMEs in terms of working capital performance and sales turnover, while for net income it takes time to see the positive trend of PT Alami Fintek Sharia financing.

Islamic Fintech Growth Prospects in Accelerating MSMEs Growth: Evidence in Indonesia

Islamic fintech plays a role in encouraging the growth of micro, small and medium enterprises (MSMEs) in Indonesia with their financing segments. The bigger the Islamic fintech, the faster the growth of MSMEs in Indonesia. This study aims to identify macroeconomic factors such as gross domestic product (GDP), interest rates and inflation in driving the growth of Islamic fintech. Using the Ordinary Least Squared (OLS) regression method, the results show that GDP and inflation have a positive effect on the growth of Islamic fintech, while interest rates have a negative effect on the growth of Islamic fintech. Improving macroeconomic conditions will encourage the growth of Islamic fintech which in turn will contribute to the growth of MSMEs, which are the main segment of Islamic fintech financing.

Світова практика впровадження фінансових технологій у банківському секторі

The purpose of the article is to study the main trends and directions of spread of financial technologies in the banking sector of foreign countries. Analyzing the introduction and use of financial technologies among influential global markets, based on data from the financial consulting group EY Global Financial Services, which since 2015 began issuing of analytical reports every 2 years, the authors have determined an annual increase in the level of spread of these technologies in the studied countries. During 2015–2019. there was an increase in the number of countries under study – from 6 to 27, and in the number of respondents – from 10 to 27 thousand. An increase in consumer involvement in the use of new financial technologies is detected, as evidenced by the increase in the level of penetration of financial services – in 2015, the average penetration level comprises 16%, in 2017 – 33%, in 2019 – 64%. The carried out study showed that the largest share of the introduction and promotion of financial technologies among the 27 studied countries is occupied by the countries of Asia, South Africa and Latin America. As for European countries, FinTech is developing here at a slower pace compared to other countries. As for the United States, this country still has less activity in the spread of financial technologies. Analyzing the segments in which FinTech finance was most financed in 2019, upon the data provided by the consulting company EY Global Financial Services Markets, it is found that the world’s leading countries have the greatest advantage of financing in FinTech banking sector, among which the highest rate in China is 92%, and the smallest amounts of financing in FinTech are carried out in the insurance sector (compared to such sectors as banking and financial management). In Asian countries as digital technology leaders, the main area where the banking industry introduces financial technologies is blockchain with cryptocurrencies, payments and transfers, as well as investments and savings. Among the main directions of FinTech-directedness in the banking sector, the largest share in the United States is occupied by: market of capitals, blockchain with cryptocurrencies, further on payments and transfers. As for the UK, P2P payments and transfers, as well as software, occupy the leading place. Prospects for further research are to analyze the introduction of financial technologies in the activities of Ukrainian banking institutions.