P2P lending adoption by SMEs in Indonesia

Monica Rosavina, Raden Aswin Rahadi, Mandra Lazuardi Kitri, Shimaditya Nuraeni and Lidia Mayangsari

Qualitative Research in Financial Markets, 2019, vol. 11, issue 2, 260-279

Abstract: Purpose - This study aims to examine the adoption of peer-to-peer (P2P) lending platforms to determine the factors that encourage SMEs to use P2P lending platforms in obtaining loans. Design/methodology/approach - A sample of ten SMEs from a variety of backgrounds was taken in Bandung, Indonesia. Bandung has been awarded the title of “creative city” by UNESCO, as the city allows for the development of the creative economy. This research used a semi-structured interview. Coding method was then used for content analysis to establish which factors emerging from the interview were leading respondents to obtain a loan through the P2P lending platform. Findings - The findings imply that loan processes, interest rates, loan costs, loan amounts and loan flexibility affect SMEs in obtaining a loan through P2P lending. Moreover, alternative payment schemes in the form ofSharia-based lending and profit-sharing schemes were found. These findings constituted the original findings of this study. Research limitations/implications - The study offers findings on factors affecting SMEs in using the P2P lending platform as a form of alternative financing. Moreover, the theoretical framework provided can be used as literature in future research. As this study was conducted in Bandung, Indonesia, the findings may not be generalisable to other regions. Originality/value - This study is one of the few studies that discusses P2P lending in Indonesia as the concept has been in practice only since 2015.

Keywords: SMEs; Fintech; Loan preferences; P2P lending (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:qrfmpp:qrfm-09-2018-0103

DOI: 10.1108/QRFM-09-2018-0103

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