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

Angela Tritto (), Yujia He () and Victoria Amanda Junaedi ()
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Angela Tritto: The Hong Kong University of Science and Technology
Yujia He: The Hong Kong University of Science and Technology
Victoria Amanda Junaedi: Business School, The Hong Kong University of Science and Technology

Financial Innovation, 2020, vol. 6, issue 1, 1-24

Abstract: 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.

Keywords: Fintech; P2P; Internet finance; Governance; Emerging market (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (3)

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DOI: 10.1186/s40854-020-00202-4

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