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Assessing the Impact of Digital and Fintech Lending on Poverty Alleviation in Indonesia: A Soft Systems Approach

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  • Thomas Airlangga
  • Yos Sunitiyoso
  • Oktofa Yudha Sudrajad

Abstract

This study assesses the impact of digital and fintech lending on poverty alleviation in Indonesia by integrating the McKinsey 7‐S Framework within the Soft Systems Methodology (SSM). While fintech lending has improved financial inclusion by expanding credit access for low‐income and digitally connected households, it also introduces new risks of over‐indebtedness, predatory lending, weak data protection, and limited financial literacy. The analysis identifies systemic misalignments in governance, regulatory enforcement, and borrower education that hinder fintech's potential as a sustainable poverty reduction tool. Findings reveal four interdependent subsystems—Consumer Protection, Regulatory Oversight, Technology Risk Management, and Financial Education—that collectively determine responsible fintech performance. Strengthening these subsystems through ethical lending standards, coordinated regulation, robust cybersecurity, and embedded financial literacy is essential for transforming fintech lending from a short‐term credit channel into a mechanism for inclusive financial resilience.

Suggested Citation

  • Thomas Airlangga & Yos Sunitiyoso & Oktofa Yudha Sudrajad, 2026. "Assessing the Impact of Digital and Fintech Lending on Poverty Alleviation in Indonesia: A Soft Systems Approach," Systems Research and Behavioral Science, Wiley Blackwell, vol. 43(4), pages 1380-1400, July.
    • Handle: RePEc:bla:srbeha:v:43:y:2026:i:4:p:1380-1400
    DOI: 10.1002/sres.70037
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