P2P Lending platforms in Malaysia: the awareness among young adults

Abstract

Background - Since 2016, the Securities Commission (SC) in Malaysia has given licenses to only eleven P2P lending platforms. Such lending platforms are expected to disrupt the lending services of traditional lenders in the coming years. However, being still in their infant stages, it is essential to know the extent to which such platforms are made known to potential investors out there. This study examines the extent to which young adults are aware of Malaysia's eleven P2P lending platforms. Methods - A sample of 65 undergraduate students majoring in finance and accounting was used for this pilot study. An online questionnaire was designed with three main parts: demographic, financial literacy, and P2P lending awareness. Results - Findings show that more than half of respondents in the sample are not aware of P2P lending platforms in Malaysia. Most of the respondents are financially literate to certain degrees. Those aware of their presence underestimated the potentially high level of their default rates and misunderstood that investor would be fully protected by such platforms when a loan default. Conclusions -The study's findings have shed light on the current awareness of P2P lending platforms among Malaysian young adults, potential investors of such platforms in the coming years.