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Governing the gold rush into emerging markets: a case study of Indonesia’s regulatory responses to the expansion of Chinese-backed online P2P lending

Author

Listed:
  • Angela Tritto

    (The Hong Kong University of Science and Technology)

  • Yujia He

    (The Hong Kong University of Science and Technology
    University of Kentucky)

  • Victoria Amanda Junaedi

    (Business School, The Hong Kong University of Science and Technology)

Abstract

Peer-to-peer (P2P) lending has the potential to boost financial inclusion in emerging markets. This paper contributes to the literature on fintech governance in emerging Asian markets. It examines the case of the Indonesian government’s approach in regulating the P2P lending sector using both primary interviews and secondary firm-level data. Driven by regulation tightening in China and regulatory gaps in Indonesia, Chinese investments became the largest in this sector contributing, however, to growing risks from illegal business practices. The Indonesian government responded by creating new regulations and institutions, mitigating risks without stifling the potential for financial inclusion. We conclude 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, 2020. "Governing the gold rush into emerging markets: a case study of Indonesia’s regulatory responses to the expansion of Chinese-backed online P2P lending," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 6(1), pages 1-24, December.
    • Handle: RePEc:spr:fininn:v:6:y:2020:i:1:d:10.1186_s40854-020-00202-4
    DOI: 10.1186/s40854-020-00202-4
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    References listed on IDEAS

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    Cited by:

    1. Eric Alexander Sugandi, 2021. "The COVID-19 Pandemic and Indonesia’s Fintech Markets," ADBI Working Papers 1281, Asian Development Bank Institute.
    2. Chong, Zhaohui & Wei, Xiaolin, 2023. "Exploring the spatial linkage network of peer-to-peer lending in China," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 630(C).
    3. Bo Li & Zeshui Xu, 2021. "Insights into financial technology (FinTech): a bibliometric and visual study," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 7(1), pages 1-28, December.

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    Keywords

    Fintech; P2P; Internet finance; Governance; Emerging market;
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