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Chinese-backed FinTech Lending Boom: How did Indonesia Respond?

Author

Listed:
  • Angela Tritto

    (Adjunct Assistant Professor at the Division of Public Policy
    Institute for Emerging Market Studies, Division of Social Science, Hong Kong University of Science and Technology)

  • Yujia He

    (Assistant Professor
    Patterson School of Diplomacy and International Commerce, University of Kentucky)

  • Victoria Amanda Junaedi

    (Research Assistant
    Institute for Emerging Market Studies, Hong Kong University of Science and Technology)

Abstract

Peer-to-peer (P2P) online lending has the potential to boost innovation and financial inclusion in emerging markets, yet it can also incur investment and borrower-related risks, such as privacy breaches. Driven by regulation control in China, Chinese investments flocked to Indonesia, causing a rapid expansion of online lending platforms. Similar to what happened in China prior to the regulatory crackdown, the P2P lending boom in Indonesia saw a rise in unethical and illegal business practices. The government responded by creating new regulations and institutions to mitigate risks without stifling the potential for financial inclusion. A proactive approach towards monitoring and regulating emerging high-tech industries should be sought by strengthening links with industry and civil society, and through international cooperation for policy and knowledge sharing.

Suggested Citation

  • Angela Tritto & Yujia He & Victoria Amanda Junaedi, 2022. "Chinese-backed FinTech Lending Boom: How did Indonesia Respond?," HKUST IEMS Thought Leadership Brief Series 2022-67, HKUST Institute for Emerging Market Studies, revised Jul 2022.
    • Handle: RePEc:hku:briefs:202267
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    File URL: https://iems.ust.hk/assets/publications/thought-leadership-briefs/2022/hkustiems-chinese-fintech-lending-boom-indonesia-respond-tritto-he-junaedi-tlb67.pdf
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