The effect of loan granted factor on peer-to-peer lending (funded loan) in Indonesia

Abstract

This study aims to determine whether the loan granted factor can affect peer-to-peer lending in Indonesia. The factors investigated in this research are the loan amount, loan period, interest rate, gender, and loan history using the data from registered and licensed peer-to-peer lending by the Financial Services Authority or Otoritas Jasa Keuangan (OJK) on November 2019. By examining 1,006 loans, the analytical method used is binary logistic regression with a significance level of alpha 0.05. The results of this research are loan amount, loan period, and loan history have the strongest impact on borrowers’ loan funding decision, suggesting that these loan characteristics can signal information that standard measures are used for loan funding. However, interest rate and gender have no significant effect on loan granted. Overall, loan funding decisions are based on proper and relevant signals given by loan characteristics.

What Drives Rahn Adoption?

“…However, though the results are insignificant, Rahn companies or Sharia pawnshops need to improve their service provision to customers to maintain loyalty, especially when the competition has become more intense. For instance, fintech firms have also increased competition since they provide customers loans (Edward et al, 2023). In dealing with fintech firms, in addition to improving service quality, Rahn companies should optimize the service offering by maximizing technology or going digital.…”

Exploring FinTech Lending: The Influence of Financing and Economic Factors on the Success of Peer-to-Peer (P2P) Funded Loans

“…Higher interest rates, better credit ratings, more successful loans, being female, and a higher credit score enhance loan approval chances, while longer repayment periods, the absence of descriptions, and a history of failed loans reduce approval likelihood. Similarly, Kurniawan and Wijaya (2020), developed a model on factors such as the loan amount, loan duration, interest rate, gender, and loan history that influence loan approval in the context of Indonesian P2P lending. The findings of their study indicate that the loan amount, loan duration, and loan history exert the most substantial influence on borrowers' decisions to secure loans, suggesting that these loan attributes convey pertinent information that guides loan approval processes.…”

“…Out of the 48 factors under consideration, 28 exert a positive influence, while 20 factors demonstrate a negative impact. A recent study by Yunies Edward, Nur Fuad, Ismanto, Dorkas Rambu Atahau, and Robiyanto (2023) conducted Ordinary Least Squares (OLS) regressions to investigate how loan information, specifically loan ranking, estimated profit shares, and financing duration, impacts the level of funding garnered from multiple sources. These findings align with both theories, indicating that the information available about the loan serves as a signal influencing the success of project funding.…”

“…The significance of lending rates on P2P platforms is noteworthy when it comes to conveying the elements of a successful loan on the platform (Canfield, 2018;Nigmonov, Shams, & Alam, 2021;Yunies Edward et al, 2023). Canfield (2018), highlighted a significant finding on loan quality control represented by credit rating, influenced by the assigned interest rates.…”

Pinjaman Online di Masa Pandemi Covid-19 bagi Masyarakat Aceh

“…Pinjaman atau kredit adalah kepercayaan dari pemilik dana untuk membayar sejumlah dana dengan harapan pengembalian di masa depan (Suiter & Thomas, 1938). Jika suatu perusahaan mendapatkan pendanaan dalam bentuk pinjaman, beberapa dana yang dipinjamkan oleh lembaga keuangan, dan perusahaan wajib mengembalikannya dalam waktu yang telah disepakati jangka waktu melalui angsuran, termasuk pokok dan bunga pinjaman (Kurniawan & Wijaya, 2020).…”