P2P lending and banking credit for MSMEs and Non-MSMEs post COVID-19 pandemic: Does it matter?

Abstract

This paper proposes an original view to determine the effect of P2P loans on MSME and nonMSME bank loans after the COVID-19 pandemic as a whole and then focuses on the island of Java (more developed areas) and outside Java (areas which are still undeveloped). The approach used in this study uses panel data regression from 33 provinces in Indonesia during Jan-Dec 2022 after the COVID-19 pandemic. The results of this study confirm that P2P lending is not a disrupter for bank credit, the details of the results are: (1) P2P lending has a significant positive effect on overall MSME banking credit, but has no significant effect on overall non-MSME banking credit; (2) P2P lending has no significant effect on MSME banking credit in Java, but has a significant positive effect on non-MSME banking credit in Java after the COVID-19 pandemic; (3) P2P lending has a significant positive effect on MSME banking credit outside Java after the COVID-19 pandemic, but has no significant effect on non-MSME banking credit in Java after the COVID-19 pandemic.