P2P Lending Research Articles

Strategi Aliansi Bank Nagari dalam Menghadapi Disrupsi Teknologi Fintech

The purpose of this study was to determine Bank Nagari's leading business segment, the type of Fintech and the collaboration model most suitable for Bank Nagari. This type of research is a case study with a descriptive qualitative approach. Research respondents are strategists or decision makers at Bank Nagari. This study uses primary data obtained from respondents' answers in the form of filling out questionnaires and interviews, namely data obtained directly from the object of research. The data analysis technique uses the Quantitative Strategic Planning Matrix (QSPM) to select alternative strategies which include Internal Factor Evaluation (IFE) matrix analysis, External Factor Evaluation (EFE) matrix analysis, weighting, rating determination and multiplication of weights with ratings. The results showed that the value of selecting the bank's business segments, namely MSME and Commercial, was the most attractive alternative strategy or had the highest average TAS score of the other alternative strategies (5.784), the value of choosing the type of Fintech P2P Lending was the most attractive alternative strategy or had a total score The highest average TAS of the other strategic alternatives (5.310), the value of selecting the Channeling as collaboration model is the most attractive strategic alternative or has the highest average Total TAS score of the other strategic alternatives (5.199).

The Impediment Factors of Customers Intentions to Borrow in Peer to Peer Lending Apps

In the last decade, Indonesia's fintech trend are supported by the growth of Internet users. A recent report by OJK in 2021 shows that online loan services continue to increase by the millennial generation's dominance. It's because online loan services are easier to gain rather than conventional loan services. Unfortunately, its service provides several potential threats to its users. Moreover, religious values play a critical role in shaping consumers' attitudes and behavior towards products or services. The purpose of this study is to analyze the role of perceived risk: security risks and privacy risks, and religiosity in predicting customers' intention to borrow in P2P Lending apps. The research approach is quantitative, with a random sampling technique, and the research sample is 86 respondents. The data were analyzed by using multiple linear regression with IBM SPSS 23. Based on the study results, it can be concluded that security risk has a negative and significant effect in predicting the intention to borrow in P2P Lending apps, but no relationship between privacy risk and religiosity on the intention to borrow. As a managerial implication, our findings can help the company to focus on providing highly secure apps and promoting and campaigning the confidentiality of users' personal information.

The Fintech Revolution: Innovations Reshaping the Financial Industry

This paper aims to explore the synergy between online payment development, P2P lending, artificial intelligence, and blockchain, and their potential impact on the financial industry. Online payment development, P2P lending, artificial intelligence, and blockchain are all key trends in the financial industry that have been rapidly evolving in recent years. However, there has been limited research that explores the synergy between these trends. The paper provides a comprehensive review of the literature and analyzes the interdependence between online payment development, P2P lending, artificial intelligence, and blockchain. The study also highlights how the convergence of these trends can revolutionize the financial industry by enabling faster and more secure transactions, better risk management, and improved customer experiences. The study finds that online payment development and P2P lending have a strong relationship, as they both rely on digital platforms and enable individuals to conduct transactions without intermediaries. Artificial intelligence and blockchain are emerging technologies that can enhance the efficiency and security of online payments and P2P lending. The study also identifies various challenges, including regulatory issues, privacy concerns, and the need for standardization, that need to be addressed for the full potential of these technologies to be realized. In conclusion, this paper provides insights into the emerging trends in the financial industry and highlights the potential of online payment development, P2P lending, artificial intelligence, and blockchain to transform the financial landscape. The findings of this study can inform policymakers, financial institutions, and investors about the opportunities and challenges of these trends.

The Future of Finance: Fintech and Digital Transformation

The realm of financial technology, or fintech, has been increasingly gaining attention and interest as it pertains to the integration of technology in financial services. This paper endeavors to provide an overview of various facets of fintech, including its impact on online payments, Peer-to-Peer (P2P) lending, Robo-advice, and blockchain technology. One significant effect of fintech is observed in the area of online payments, where traditional banking methods are being substituted with more advanced online payment systems. Fintech has emerged as a promising solution to the challenge of convenient, secure, and fast payment transactions for goods and services. P2P lending, another fintech innovation, enables borrowers to obtain loans without having to go through traditional financial institutions. This process has been simplified and made more accessible through the use of fintech platforms that connect borrowers with lenders. The paper also addresses the use of Robo-advice in fintech, which utilizes algorithms and artificial intelligence to provide financial advice to clients. Robo-advice technology has increased accessibility to financial advice for a more extensive range of people, reducing the barriers that might have limited access to this type of financial service. Finally, this paper examines the importance of blockchain technology in fintech, with its potential to streamline processes and ensure security in financial transactions. The decentralized nature of blockchain technology offers a robust solution to financial security, ensuring that transactions are secure, transparent, and immutable. In conclusion, the essay underlines the transformative potential of fintech in the financial industry with its numerous innovations.

Fintech and Digital Transformation: Accelerating Innovation in Financial Services

This paper focuses on the progress made in the field of financial technology as a result of digital development. The study highlights several major areas of financial technology and analyzes its risk level and future prospects. The research indicates that the areas of online payment and P2P lending are advancing successfully, and their respective legal and regulatory systems are relatively well-established. However, the development of Robo-Advisor and Blockchain faces significant challenges due to uncertainty and a lack of clarity regarding regulatory frameworks. The emergence of ChatGPT has disrupted the traditional understanding of Robo-Advisor, presenting new opportunities for development. On the other hand, the development of products based on blockchain technology poses a great risk as it is challenging to accurately determine their intrinsic value. Overall, digital development has greatly impacted the financial technology industry, and the study emphasizes the importance of understanding the risks associated with new technologies. The research recommends that regulators should work towards creating clear and comprehensive regulatory frameworks to promote responsible innovation in the financial technology sector.

Peer to Peer Lending Syari’ah

The interest of Indonesian people in investing in real sector businesses, particularly MSMEs, is relatively low due to high risks and business uncertainties. Unfortunately, Sharia Financial Institutions have not played an active role in channeling cooperation-based financing. Instead, they have mostly focused on channeling murabahah financing under the buying and selling scheme. However, Sharia P2P Lending can help develop the real sector and have a positive impact on the national economy by reducing bureaucracy and complicated requirements. Sharia P2P Lending is an investment platform in real sector businesses that benefits business actors and investors. The use of Sharia P2P Lending can encourage the public to invest in the real sector because of the following reasons: (1) it provides a safe investment with higher returns compared to conventional investments, (2) it offers access to invest in the real sector with relatively small capital, (3) it allows investors to choose business actors and monitor their investment performance, (4) it has relatively low transaction costs and is easy to conduct transactions online, and (5) it provides protection through risk management and financing management policies carried out by the company.

The Synergistic Power of Fintech and Digital Transformation

Through the process of transforming from traditional methods to digitalization, the financial industry has proved that digital transformation has improved the efficiency of the financial industry. The development and needs of the times have promoted the innovative development of the financial industry, leading to the emergence of financial technology. Fintech has optimized some of the disadvantages of traditional finance, making it a technology that modern humans rely on, leading to changes in the financial industry. This paper analyzes aspects of digitalization such as online payments, P2P lending markets, artificial intelligence advisors, and blockchain. For the different parts, the differences between them and the traditional methods are discussed. Whether these technologies are mature or stable, their impact on the financial industry and some regulatory problems are analyzed. Future directions of this industry are summarized by exploring more different strengths, weaknesses, and implications for the financial industry from these sections.

Klausula Eksonerasi Pada Perjanjian Pinjam Meminjam Uang Dalam Layanan Pinjaman Online (Fintech Peer To Peer Lending)

This study aims to discuss legal issues, namely the void of norms because POJK No.77/POJK.01/2016 concerning information technology-based money-lending services with the terms and conditions of fintech p2p lending providers are not in line with their practices and can cause legal problems because there is no protection. law for lenders in the practice of online lending and borrowing money services so that it can lead to legal conflicts and the absence of legal certainty or special rules regarding the transfer of responsibility from the organizer, of course, is quite detrimental to its users (lenders). Based on the issues studied, the authors use a type of normative legal research which studies legal materials, both primary and secondary legal materials. Normative research places law as a system of norms because this type of research looks at aspects of understanding a legal norm contained in a law and norms that live and develop in society. The nature of the research used is analytical descriptive, the author tries to describe events and incidents that are the center of attention without giving special treatment to these events. The Consumer Protection Law prohibits the inclusion of exoneration clauses related to information technology-based money lending and borrowing agreements, but OJK provisions do not explicitly regulate the legal consequences of including exoneration clauses so that there is a void in norms and can lead to legal conflicts so that harmonization of these norms is necessary.

Herding behaviour in peer-to-peer lending: the elaboration likelihood during the COVID-19 crisis

ABSTRACT North American consumers can usually act as borrowers or lenders using peer-to-peer (P2P) lending platforms to assess creditworthiness and mitigate information asymmetries on their own. However, as in many sectors, the COVID-19 crisis has also affected the finance industry. Overall, consumer decision-making on P2P lending platforms has changed dramatically resulting in a decrease in the number of transactions. P2P lending platforms can exploit people’s behavioural biases associated with hype whereas mediated information about COVID-19 crisis is beyond the control of these platforms. This research work aims at providing greater knowledge on how consumers build their decision-making under fuzzy information environment. A two-way ANOVA enables to strengthen this approach with data collected from a P2P lending platform between January 2019 and December 2020. This paper demonstrates that the elaboration likelihood model is a strong framework to explain consumer herding behaviour on online lending platforms.

The important role of the DTPB in the development of Islamic P2P lending in Indonesia

Purpose − the purpose of this study is the determinants of factors influencing to the intention in Islamic Peer to Peer (P2P) financing platform. Methodology − Quantitateve approach with distributing questionnare accross Islamic P2P financing platforms consisting of ethis.co.id, ammana.id, alamisharia.id, danasyariah.id and qazwa.id employed. 121 usable sample is analsyed with using PLS-SEM and Smart PLS 3.2 opreated as analysis tools.Findings − The results show that normative influence affects positively and significantly the subjective norm. In terms of attitude control, only perceived uselfulness has insiginificant influence on attitude. Moreover, self-efficacy and facilitating condition has a positive and significant impact on perceived behaviour control. Attitude and perceived berhaviour control affect intention to participate. However, subjective norm has insignificant impact on intention to participate in P2P financing platform.Implications − The study suggests that islamic P2P should focus on relative advantage and perceived ease of use, perceived behavioral control in order to maintain their customers.Originality − Decomposed Theory of Planned Behavior model (DTPB) used in the study as the first study in Islamic P2P lending in Indonesia

Prepayment and credit utilization in peer-to-peer lending

PurposeThis research analyzes borrowers' credit utilization through prepayment behavior in peer-to-peer (P2P) lending. The authors investigate factors influencing the decision to prepay and assess the role of P2P lending as an alternative source of consumer credits.Design/methodology/approachThe authors use individual loan-level data from the LendingClub, one of the largest P2P platforms in the USA. The authors use a Logit model and a sample selection model estimated by the two-stage Heckman method. The empirical analysis considers borrower-specific and loan-specific characteristics as well as macroeconomic factors.FindingsThe authors present a number of significant findings that can enhance understanding consumers' financing decisions. The authors offer evidence that borrowers are able to take advantage of cheaper loans offered by P2P lending to better manage credit card balance and consolidate debt. The authors find that borrowers tend to prepay P2P loans quickly when the aggregate cost of borrowing is low, suggesting that P2P lending offers an efficient alternative to obtain credit. This is particularly true for creditworthy borrowers that are able to take advantage of competing sources of finance. The authors' results provide evidence that P2P lending can improve consumers' optimal credit utilization.Originality/valueP2P lending has grown exponentially and has become a significant credit supplier to consumers and small businesses. While the existing literature mostly focuses on default risks, prepayment has received much less attention. This research fills in the gap and investigates borrowers' prepayment behavior in P2P loans and the role of P2P lending as an alternative source of consumer credits.

Factors Influencing Interest in Muslim Entrepreneurs as Financing Partners for Sharia P2P Lending

Factors Influencing Interest in Muslim Entrepreneurs as Financing Partners for Sharia P2P Lending

Fintech: Exploring the Digital Transformation of Banking & Financial Services

Fintech has exploded since the Internet revolution. Today, fintech has given rise to numerous segments, and many financial technologies have gained wider application. Among which the most active fintech areas are: online payments via digital currency without the need for cash; P2P lending, which enables direct person-to-person lending without the use of intermediaries; robo-advice, which use algorithms to provide investment advice; and distributed ledger technology (DLT) blockchain. They are all widely used in some countries around the world, but have not yet undergone a complete replacement. These emerging financial technologies have undoubtedly revolutionary implications for traditional finance, providing new ideas for the development of the financial sector. The problems they generate deserve attention as well. This paper introduces the development history of these four financial technologies, compares them with the traditional way of operation in the financial field in which they applied, and analyzes the advantages and limitations of these financial technologies. Finally, reflections on the future of fintech development are presented.

P2P Crowdfunding: An Alternative Source of Credit for Enhancing the Financial Inclusion of Small Holder Farmers

Background: Indian agriculture is considered as a major source of livelihood generation for more than 58 percent of rural households. Credit is a pivotal element both in agricultural production and marketing system. Presently, most of the marginal and small farmers solely depend on localized lending models viz., village money-lenders who lend money to farmers for short term. The ministry of agriculture estimates that to double farmers’ income, private investment in agriculture must increase to two-fold. P2P crowdfunding is gaining grip at a very fast pace and gradually becoming an attractive investment option for investors.
 Methods: This paper attempts to explore different aspects of P2P crowdfunding and its scope as an alternate source of credit for the small and marginal farmers. Based on secondary data analysis (2014-2022) from a number of research papers, RBI notifications, blogs and newspaper articles.
 Results: It is evident that the global peer to peer (P2P) lending market size was valued at $67.93 billion in 2019, and is projected to reach $558.91 billion by 2027, growing at a CAGR of 29.7% from 2020 to 2027. This type of funding option has tremendous potential to magnify agriculture capital markets by allowing agricultural firms to build value more efficiently and involve more people directly in food production. The paper distinguishes the advantages of P2P lending over traditional credit system and private lending that are predominant in agriculture. However, P2P lending has its own limitations that is also discussed. Additionally, companies as well as investors need to analyse crowdfunding options carefully as per its economic feasibility and structure so that it will lead to mutually beneficial investment relationships.

Interdependence between online peer‐to‐peer lending and cryptocurrency markets and its effects on financial inclusion

Online peer‐to‐peer (P2P) lending has emerged as an innovative financial technology (FinTech) platform that renders financial services that are potentially more inclusive and affordable than those offered by traditional financial institutions. A similar purpose is served by cryptocurrency markets, where transaction costs are reduced and financial accessibility is improved based on disruptive technologies such as blockchain and distributed ledgers. Despite these developments, however, in the operations management literature limited attention has been devoted to the contribution of online P2P lending to the promotion of financial inclusion (i.e., the availability and usage of financial services for all groups of people) and its dynamic interplay with cryptocurrency markets. The rise of cryptocurrency markets affects the composition and activity of borrowers and investors in P2P lending markets and hence the capacity of the latter to support financial inclusion, leading to an operations management challenge in online P2P lending. We examine how cryptocurrency markets influence P2P lending markets' democratization of access to financial services, particularly P2P borrowing. To investigate these effects in depth, we develop a simple theoretical model to derive testable propositions, which are then empirically validated on the basis of unique data sets. We find that the growth in cryptocurrency markets is associated with increased loan requests and larger loan amounts in P2P markets, especially from borrowers who maintain good credit ratings, possess technical knowledge about cryptocurrencies, and intend to borrow for investment purposes. Our results suggest that cryptocurrency markets bring economic gains to the P2P lending market, at least in the short term. Nonetheless, the transfer of funds from P2P lending to cryptocurrency markets, particularly by highly creditworthy and tech‐savvy investors, may provoke increased inequality in access to P2P lending markets. By scrutinizing the interdependence between two representative FinTech markets we uncover important operations management implications for theory and practice regarding the healthy growth and effective governance of crowdfunding platforms and the corresponding sustainability of their role in upholding financial inclusion.

Balancing Innovation and Regulation for Financial Inclusion: The Future of P2P Lending in Indonesia

This comprehensive analysis delves into Indonesia’s burgeoning Peer-to-Peer (P2P) lending sector, focusing on its transformative potential for financial inclusion and the inherent challenges of customer protection. The article scrutinizes the exponential growth trajectory of P2P lending platforms, a phenomenon propelled by escalating internet penetration, widespread smartphone usage, and a substantial unbanked population in the country. It also sheds light on the risks associated with the proliferation of illegal platforms outside the regulatory framework. The article underscores the need for robust regulatory compliance and effective risk management strategies to ensure customer protection and maintain market stability in this rapidly evolving sector. It delves into the regulatory measures established by Indonesia’s Financial Services Authority (OJK). It discusses the necessity for these regulations to be continuously reviewed and enhanced to keep pace with market developments. The article further explores the potential of P2P lending platforms in promoting financial inclusion by providing an accessible and convenient avenue for individuals and small businesses to access credit. It discusses how these platforms leverage alternative data for credit scoring, thereby enabling those without a traditional credit history to gain access to loans. In conclusion, the article emphasizes that striking a delicate balance between fostering innovation and ensuring stringent regulatory compliance is crucial for Indonesia’s sustainable growth of the P2P lending sector. It advocates for a regulatory environment that nurtures innovation while safeguarding customer interests and maintaining overall market stability. The article posits that achieving this balance will enable Indonesia to fully harness the potential of P2P lending, thereby driving financial inclusion while simultaneously ensuring customer protection and market stability.

P2P lending: Moderation of desirability of control on risk-taking decisions of Indonesian borrowers

The number of users of peer-to-peer (P2P) lending applications in Indonesia continues to grow rapidly even though it is followed by increased cases of alleged criminal violations in the financial sector. Users continue to use these financial technologies despite being aware of the high risks and potential negative consequences they may receive. Meanwhile, the results of previous research in the context of financial technology show that the higher the risk perceived by users, the more discouraged they are from using financial technology. In addition, the number of studies that discuss decision-making at the user group level is still limited. Tests using the structural equation model (SEM) method showed that the desirability of control moderates the negative effect of perceived risk on P2P lending usage intention. The desirability of control is proven to weaken the effect of perceived risk on the intention to use P2P lending. As a result, borrowers with high desirability of control tend to ignore the high risk of using online lending providers so they will continue to take these actions. Meanwhile, borrowers with low desirability of control try to maintain their control by avoiding the use of P2P lending. In addition, the Bollen–Stine bootstrap procedure also showed that the model meets the goodness of fit even though the data was not normally distributed in multivariate analysis. The results of this study also imply that the government needs to formulate regulations to tighten lending procedures to minimize the potential for defaults on debt that harm the community and online lending providers.

Do Word of Mouth and Religiosity Affect the Interest of MSME Actors in Sharia P2P Lending?

This study aims to determine (1). The influence of religiosity on the interest of MSME actors in Sharia peer to peer lending, (2). The influence of word of mouth on the interest of MSME actors in Sharia peer to peer lending, and (3). The influence of religiosity and word of mouth on the interest of MSME players in Sharia peer to peer lending. The object of this research is the SMEs in Banten province. The research method used is quantitative. Data collection techniques using a questionnaire in the form of a series or collection of questions that are arranged systematically in a list of questions, then sent to the respondent to be filled out. Questionnaires were distributed to 99 MSME actors in Banten Province. Data were analyzed using multiple linear regression methods through SPSS software version 23. The results of this study indicate that (1). Religiosity has a positive and significant effect on the interest of MSME actors in Sharia peer to peer lending. (2). Word of mouth has a negative and insignificant effect on the interest of MSME actors in sharia peer to peer lending, and (4). Word of mouth and religiosity have a positive and significant effect on the interest of MSME players in sharia peer to peer lending. The total contribution of the influence of religiosity, and Word of mouth on the interest in making loans at P2P Lending Syariah is 39.6 percent, while the rest is influenced by other variables not examined in this study.

Social identity of civil servants and online peer-to-peer lending: Evidence from China

Using a novel dataset of 1,777,847 peer-to-peer (P2P) transactions between 2010 and 2017, we investigate how the social identity of Chinese civil servants affects P2P lending. The empirical results indicate that the social identity of civil servants leads to a higher probability of obtaining loans and a lower interest rate in P2P lending. Our results thus reveal that Chinese civil servants obtain considerable benefits in the P2P lending market compared with non-civil servants; these empirical results remain robust after considering sample selection bias.

Digital Transformation in the FinTech Sector

This paper mainly analyzed the specific application of fintech technology in different aspects, and the changes this emerging technology can bring to people's lives. In terms of the payment system, the formation of oligopoly may lead to serious uneven market competition. Although clients with personal advisers are less likely to trust the services of robots, robo-advice can provide better investment advice to ordinary people and expand the benefit group. For P2P lending, this is a new lending model, eliminating the tedious steps and high fees of the middleman. Virtual currency as an original application of blockchain is the financial derivative that threatened the financial money investment market. The author explained how to benefit more consumers through fintech technology, and the progress of technology enables customers of different classes to have better service experience. The digitalization process of financial services promotes economic development and can provide customers with more inclusive and professional financial services. Fintech has gradually changed the pattern of the financial industry, gradually weakened the role of financial intermediaries, and created a new operating system.