Peer-to-Peer lending platform: from substitution to complementary for rural banks
Date
2020Author
Kohardinata, Cliff
Suhardianto, Novrys
Tjahjadi, Bambang
Metadata
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This study aims to examine the impact of the growth of peer-to-peer (P2P) lending on the growth of rural bank
lending. Further, this study investigates the outcome of the partnership agreement between the Rural Bank Association and
Financial Technology (FinTech) Association in the last quarter of 2017 on the effect of P2P lending on rural bank lending
by analyzing the impact separately in 2018 and 2019. The publicly available data from the Financial Services Authority and
Bank of Indonesia were examined using panel data regression. The results show that P2P lending’s growth is a substitute
for the growth of the rural bank loan in 2018. However, the partnership between the Rural Bank Association and FinTech
Association changed the effect of substitution into complementary in 2019. Moreover, the impact of P2P lending was more
prominent in provinces with a higher number of rural banks and regions with lower economic growth. The restricted number of publicly available data becomes the limitation of this study to obtain the best results.
