After The Emergence Of Peer-To-Peer Lending, Will Peer-To-Peer Lending Be Disrupted By The Transformation Of Other Lending Financial Institutions?

Abstract

This paper examines the development of conventional commercial lending banking, commercial Islamic lending banking, and rural credit banks on the emergence of financial technology peer-to-peer lending, which is said to disrupt financial institutions. This study aims to determine whether the transformation of commercial credit banks, both conventional - Sharia and rural credit banks, can interfere with the development of fintech p2pl. The author uses a mixed methods approach both qualitatively and quantitatively, using the philosophy of pragmatism. The authors see that the occurring phenomena can provide new knowledge, and different perspectives can help interpret the results. This study begins with the author using a qualitative method to explore the determinant factors that make fintech p2pl, conventional lending banks, sharia lending banks, and rural banks more successful in the market. And then, the authors confirmed the literature from the previous studies. The authors interviewed practitioners with at least fifteen years of work experience in the financial industry, with a minimum position of senior manager up to C-level. After conducting the interviews, the authors confirmed the results by referring to the literature from previous studies. Then, the qualitative results were described again using NVivo to obtain variables to be tested quantitatively, which aims to determine the relationship between variables that have been explored through interviews with practitioners. Surprising results were obtained in this study, where Islamic banking dramatically affects the market and can disrupt financial markets in Indonesia. Apart from that, the lack of financial literacy in the community has resulted in less financial growth, such as banking lending and fintech p2pl.