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P2P lending adoption by SMEs in Indonesia

Author

Listed:
  • Monica Rosavina
  • Raden Aswin Rahadi
  • Mandra Lazuardi Kitri
  • Shimaditya Nuraeni
  • Lidia Mayangsari

Abstract

Purpose - This study aims to examine the adoption of peer-to-peer (P2P) lending platforms to determine the factors that encourage SMEs to use P2P lending platforms in obtaining loans. Design/methodology/approach - A sample of ten SMEs from a variety of backgrounds was taken in Bandung, Indonesia. Bandung has been awarded the title of “creative city” by UNESCO, as the city allows for the development of the creative economy. This research used a semi-structured interview. Coding method was then used for content analysis to establish which factors emerging from the interview were leading respondents to obtain a loan through the P2P lending platform. Findings - The findings imply that loan processes, interest rates, loan costs, loan amounts and loan flexibility affect SMEs in obtaining a loan through P2P lending. Moreover, alternative payment schemes in the form ofSharia-based lending and profit-sharing schemes were found. These findings constituted the original findings of this study. Research limitations/implications - The study offers findings on factors affecting SMEs in using the P2P lending platform as a form of alternative financing. Moreover, the theoretical framework provided can be used as literature in future research. As this study was conducted in Bandung, Indonesia, the findings may not be generalisable to other regions. Originality/value - This study is one of the few studies that discusses P2P lending in Indonesia as the concept has been in practice only since 2015.

Suggested Citation

  • Monica Rosavina & Raden Aswin Rahadi & Mandra Lazuardi Kitri & Shimaditya Nuraeni & Lidia Mayangsari, 2019. "P2P lending adoption by SMEs in Indonesia," Qualitative Research in Financial Markets, Emerald Group Publishing Limited, vol. 11(2), pages 260-279, June.
    • Handle: RePEc:eme:qrfmpp:qrfm-09-2018-0103
    DOI: 10.1108/QRFM-09-2018-0103
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    Citations

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    Cited by:

    1. Babak Naysary & Ruth Tacneng & Amine Tarazi, 2021. "Adoption of fintech services: role of saving and borrowing mechanisms," Working Papers hal-03335254, HAL.
    2. Qian Wang & Jinbao Yang & Yung‐ho Chiu & Tai‐Yu Lin, 2020. "The impact of digital finance on financial efficiency," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(7), pages 1225-1236, October.
    3. Yun Ye & Yongjian Pu & Ailun Xiong, 2022. "The impact of digital finance on household participation in risky financial markets: Evidence-based study from China," PLOS ONE, Public Library of Science, vol. 17(4), pages 1-16, April.
    4. Qian Wang & Jinbao Yang & Yung‐ho Chiu & Tai‐Yu Lin, 2023. "Cross‐regional comparative study on digital finance and finance efficiency in China: The eastern and non‐eastern areas," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 68-83, January.
    5. Mohammad Tariqul Islam Khan & Gan Han Yee & Gerald Goh Guan Gan, 2023. "Antecedents of Intention to Use Online Peer-to-Peer Platform in Malaysia," Vision, , vol. 27(5), pages 680-694, November.
    6. Lindong Ma & Xihui Chen & Jiawen Zhou & Luigi Aldieri, 2022. "Strategic Management Accounting in Small and Medium-Sized Enterprises in Emerging Countries and Markets: A Case Study from China," Economies, MDPI, vol. 10(4), pages 1-23, March.
    7. Huang, Shuo, 2022. "Does FinTech improve the investment efficiency of enterprises? Evidence from China’s small and medium-sized enterprises," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 571-586.
    8. Nisha Mary Thomas, 2023. "Modeling key enablers influencing FinTechs offering SME credit services: A multi-stakeholder perspective," Electronic Markets, Springer;IIM University of St. Gallen, vol. 33(1), pages 1-27, December.
    9. Babak Naysary & Siti Nurbaayah Daud, 2021. "Peer to Peer Lending Industry in China and Its Implication on Economic Indicators: Testing the Mediating Impact of SMEs Performance," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 12(2), pages 106-114, April.
    10. Abbasi, Kaleemullah & Alam, Ashraful & Du, Min (Anna) & Huynh, Toan Luu Duc, 2021. "FinTech, SME efficiency and national culture: Evidence from OECD countries," Technological Forecasting and Social Change, Elsevier, vol. 163(C).
    11. Xiaomeng Lu & Jiaojiao Guo & Hailing Zhou, 2021. "Digital financial inclusion development, investment diversification, and household extreme portfolio risk," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(5), pages 6225-6261, December.

    More about this item

    Keywords

    SMEs; Fintech; Loan preferences; P2P lending;
    All these keywords.

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