Analysis of MSME Financial Intelligence Level in the Utilization of Peer-to-Peer (P2P) Lending as a Financing Alternative in Batam City

Rony Ukurta Barus (), Isfenti Sadalia and Chairul Muluk
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Rony Ukurta Barus: University of North Sumatra
Isfenti Sadalia: University of North Sumatra
Chairul Muluk: University of North Sumatra

A chapter in Proceedings of the 19th International Symposium on Management (INSYMA 2022), 2023, pp 201-205 from Springer

Abstract: Abstract Micro, Small, and Medium Enterprises (MSME) is Indonesia’s main corporate sector, with 97% of Indonesia’s total workforce. Capital fulfillment is one of the obstacles to MSME’s development. While most Indonesian MSMEs have various weaknesses in meeting banking requirements for financing, technological developments in the financial services sector have created peer-to-peer (P2P) lending service providers. However, the existence of P2P lending is not perfect for MSME alternative lending in Indonesia, including Batam city. The study aims to analyze SMEs’ level of financial intelligence when using P2P lending as alternative lending. The location of this survey was Batam, with respondents from up to 150 SMEs in Batam. This study is related to data analysis techniques using the partial least squares (PLS) method using SmartPLS software version 3. The results show that the level of financial intelligence of MSME actors in Batam is still low to understand the benefits of P2P. Credit as an alternative. It can be used to raise funds to meet the business capital. This study concludes that MSMEs need to better understand peer-to-peer lending services as an alternative funding source for their capital sufficiency.

Keywords: Micro; Small and Medium Enterprises; Peer-to-Peer Lending; Financing; Capital (search for similar items in EconPapers)
Date: 2023
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DOI: 10.2991/978-94-6463-008-4_27

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