Exploring the Critical Factors Affecting Lender Trust to Invest in Online Peer-to-Peer Lending in Indonesia

Proceedings of the 33rd International Business Information Management Association Conference, IBIMA 2019: Education Excellence and Innovation Management through Vision 2020, 2019, pp. 6056–6066

11 Pages Posted: 22 Jul 2021 Last revised: 6 Dec 2022

See all articles by Amanda Ardelia

Amanda Ardelia

Universitas Indonesia

Zuliani Dalimunthe

Universitas Indonesia

Rachmadi Agus Triono

Universitas Indonesia

Date Written: May 30, 2021

Abstract

This study aims to evaluate critical factors that drive lender trust in the platform to provide lend through a Peer-to-Peer (P2P) Lending Platform. P2P lending is a financial technology that facilitates lending mechanisms between lenders and borrowers through the Internet without collateral and financial institutions' involvement. Thus, lenders should trust the platform to willingly making a transaction using the online lending systems. We hypothesize that perceived regulatory protection, service quality, and security protection build the lender's trust in the P2P lending platform and investor willingness to invest. We test the model using empirical data from 180 participants experienced in Indonesia P2P lending using the structural equation (SEM) method. The results show that Willingness to Lend is significantly affected by Trust in Platform, while Perceived Regulatory Protection, Service Quality and Security Protection are significant factors influencing lenders' Trust in the Platform.

Keywords: Peer-to-Peer Lending, Trust in Platform, Willingness to Lend, Indonesia

JEL Classification: G11, G5, G21, G23, G24

Suggested Citation

Ardelia, Amanda and Dalimunthe, Zuliani and Triono, Rachmadi Agus, Exploring the Critical Factors Affecting Lender Trust to Invest in Online Peer-to-Peer Lending in Indonesia (May 30, 2021). Proceedings of the 33rd International Business Information Management Association Conference, IBIMA 2019: Education Excellence and Innovation Management through Vision 2020, 2019, pp. 6056–6066, Available at SSRN: https://ssrn.com/abstract=3889859 or http://dx.doi.org/10.2139/ssrn.3889859

Amanda Ardelia

Universitas Indonesia ( email )

Kampus Baru UI Depok
Jawa Barat, 16424
Indonesia

Zuliani Dalimunthe (Contact Author)

Universitas Indonesia ( email )

Indonesia

Rachmadi Agus Triono

Universitas Indonesia ( email )

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