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The Entrepreneurs’ Insights and Fears Towards Sharia Fintech Lending (Study of SMEs in West Sumatra)

In: Proceedings of the International Conference on Entrepreneurship, Leadership and Business Innovation (ICELBI 2022)

Author

Listed:
  • Rayna Kartika

    (Universitas Andalas, Faculty of Economics and Business)

  • Annisaa Rahman

    (Universitas Andalas, Faculty of Economics and Business)

Abstract

The innovation of financial technology (fintech), especially in peer-to-peer lending (P2PL), has reached significant users in the last couple of years. P2PL has been utilized worldwide, including in Indonesia, by interns of investing and lending funds. By 2021, there will be more than 125 fintech peer-to-peer lending companies in Indonesia licensed by Financial Services Authorities (FSA) to serve financial issues of SME. 10 out of 125 peer-to-peer lending in Indonesia are sharia fintech lending which has been registered and licensed by FSA in June 2021. As the increase of P2PL has become more complex and advanced, there should be an empirical investigation of the entrepreneurs’ intention to utilize sharia P2PL. Therefore, this research empirically tests how trust, the attitude of entrepreneurs, perceived ease, perceived risk, and perceived use affect the intention of entrepreneurs to use the Sharia P2PL plat form in financing their business. The design of this research uses a quantitative approach where the data are obtained from questionnaire distribution. The data is analyzed using the Structural Equation Model (SEM) with intelligent PLS. From the distributed questionnaires, 100 SMEs participated in this research. The findings show that trust affects the intention of entrepreneurs to use Sharia P2PL, while perceived ease does not affect the intention of entrepreneurs to utilize Sharia P2PL. Interestingly, perceived use and attitude affect the intention of entrepreneurs to use Sharia P2PL, while the risk factor does not affect the intention of entrepreneurs to use Sharia P2PL.

Suggested Citation

  • Rayna Kartika & Annisaa Rahman, 2023. "The Entrepreneurs’ Insights and Fears Towards Sharia Fintech Lending (Study of SMEs in West Sumatra)," Advances in Economics, Business and Management Research, in: Donard Games & Maruf (ed.), Proceedings of the International Conference on Entrepreneurship, Leadership and Business Innovation (ICELBI 2022), pages 530-539, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-350-4_52
    DOI: 10.2991/978-94-6463-350-4_52
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