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

Angela Tritto (), Yujia He () and Victoria Amanda Junaedi ()
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Angela Tritto: Adjunct Assistant Professor at the Division of Public Policy
Yujia He: Assistant Professor
Victoria Amanda Junaedi: Research Assistant

No 2022-67, HKUST IEMS Thought Leadership Brief Series from HKUST Institute for Emerging Market Studies

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.

Pages: 6 pages
Date: 2022-07, Revised 2022-07
New Economics Papers: this item is included in nep-ban, nep-fle, nep-pay and nep-sea
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