The Role of Insurance in Anticipating the Risk of Default in Peer to Peer (P2P) Lending Scheme (original) (raw)
Related papers
Mitigation of Default Risk through Insurance in Peer-to-Peer Lending Financial Technology
Proceedings of the 2nd International Conference on Law, Economic, Governance, ICOLEG 2021, 29-30 June 2021, Semarang, Indonesia
Mitigation of default risk through insurance is a solution to the high default rate. The non-collateral loan system in the Peer-to-Peer Lending (P2PL) is the reason for the high popularity of this service. Nevertheless, some legal problems result from the absence of collaterals from the borrower and P2PL provider in the event of default because no one guarantees the lender's rights. A borrower can run because the P2PL provider does not require the lender and borrower to meet face to face. In addition, a lender also has to spend much money collecting the borrower's debt. This problem weakens the lender's interest in investing, thus hindering credit accessibility in society. This study applied a normative legal research method using a conceptual approach. This study concludes that default risk mitigation has not explicitly been regulated in the positive Indonesian law, thus creating legal problems related to legal certainty and legal protection, especially for lenders investing their funds in P2PL services. The implementation of default risk mitigation through an insurance mechanism in providing P2PL service is the best scheme to provide legal protection for lenders in investing their funds which have implications for increasing public confidence in improving capital needs in Indonesia.
The Effect of Lender's Protection on 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
This study aims to analyze how lender protection for default risk provided by peer to peer lending platform (P2P) effect to prospective lenders' lending intentions in Indonesia, and use platform trust as the mediating variable. We collected and summarized protection terms provided by P2P platform through examined 17 platforms websites and interview two platforms' management. We also survey 303 respondents accessed through online questionnaire. Analysis of this study used Path Analysis of Structural Equation Model (SEM) method run with LISREL software. Respondents are prospective lenders who familiar with P2P Lending concept and some of them are real lenders. We found that there are several policy perceived as protection for lenders, such as having SLIK checking, using machine learning technology to record and analyze loan, joining in international forums related to credit risk management and collaborate with financing company to overcome the risk of shortage fund. We also found that the peer to peer lending platform should be able to build lender trust by making lenders feel protected to invest on the platform despite the possibility of default risk. We suggest that Financial Services Authority (called OJK) may create protection policies to protect lenders in the market like Indonesian Securities Protection Fund (ISPF).
2018
It has been commonly known that it is not easy for micro, small and medium enterprises (hereinafter referred to as MSMEs) and start up business to have access to the bank loans as a means of financing due to strict banking regulations imposed. These business really need financially supports by financier and legal protections from the goverment. In Indonesia, the category and classification of MSMEs is regulated in Act No. 20 of 2008. In digitalisation era, the legislation, and supervision have to adopt to the new innovation platform. In concequence, Financial Services Authority/ Otoritas Jasa Keuangan (hereinafter referred to as OJK) has prescribed about Lending Service Based on Financial Technology No.77/POJK.01/2016 and has established Circular Letter of the Financial Services Authority Number 18 / SEOJK.02 / 2017 on Risk Management and Governance on Lending Service Based on Financial Technology. Based on normative methodoly research, the authors will apply conceptual approach in the light proximity of banking law and commercial jurisprudence perspective, this article will examine the characteristic of peer to peer lending fintech service and the mitigation risk of financial technology service in order to the legal protection for the contracting parties
2020
In fulfilling everyday needs, certainly needing equipment and supporting equipment in practice. However, due to limited capital, the background of the birth of legal entities from the government to the private sector offered a program to lend money which was then used for capital. In the process, this loan is often called a credit agreement in which the minimum requirement is a guarantee that will later be used as a collateral object. The guarantee acts as an addition (accesoir) to the main agreement which is to convince the creditor of the assets of the debtor and their ability to make payments later. Because not everyone has sufficient assets to make a loan, a guarantee institution arises that provides a loan program without using collateral. In connection with the development of technology, a new program was born, namely peer to peer lending based on financial technology. Ease in requirements and track record written in a system is the attraction of this type of loan, but because...
The Self Regulation on Peer to Peer (P2P) of Lending Industry in Indonesia as Problems and Prospects
Jurnal Pembaharuan Hukum, 2022
The purpose of this research is to find out that the industrial revolution 4.0 has had a significant impact, especially in the use of technology and the internet in daily human activities, both in personal life and in economic activities. This study used a normative legal research method that examines various legal theories related to financial technology both in Indonesia and other countries. The P2P lending service carries out business activities by providing, managing, and operating money-borrowing services by utilizing information technology as a liaison. Peer to Peer (P2P) Lending in Indonesia is regulated in POJK No. 77/POJK.01/2016 concerning Information Technology-Based Lending and Borrowing Services. This regulation is the basis for the implementation of P2P Lending business activities or online borrowing, which is one type of fintech, including regulations regarding supervision carried out by the Financial Services Authority (OJK) on the implementation of these business activities. However, in practice, lending by P2P Fintech has attracted a lot of controversies because there are still many problems, including interest arrangements, the rise of illegal fintech applications and also the weakness of consumer protection where these things have not been fully addressed and regulated by POJK No. 77/POJK. 01/2016.
KRTHA BHAYANGKARA, 2020
The development of information technology is very rapid, the collaboration between information technology and various fields of life bring in to various kinds of innovations that make people's lives easier. Innovations in information technology bring in to new business models which in turn can produce efficiency for the community. The information technology revolution continues to grow and now entering the financial sector which is highly regulated. Collaboration between information technology and finance bring in to Financial Technology (Fintech), which is information technologybased money-lending (Peer to Peer Lending/P2P Lending). It is easier for people to access their financial needs through P2P Lending. On the other hand, challenges arise in P2P Lending regarding data protection (personal data, transaction data and financial data). In this research, only the personal data of the Borrower will be discussed, where the personal data needs to be protected so there is no misuse that causes legal problems.
The Problems of Consumer Protection in Fintech Peer To Peer Lending Business Activities in Indonesia
Sociological Jurisprudence Journal
Industrial Revolution 4.0 has influenced the development of technology and information. The presence of financial technology (fintech) especially fintech peer to peer lending in Indonesia is proof that the Industrial Revolution 4.0 has had an influence on economic aspects as a fundamental aspect of the country. The implementation of fintech peer to peer lending in providing alternative financing to consumers is currently faced with several problems, especially issues related to consumer protection. This study uses a normative legal research method with a statutory approach. This research shows that the state has tried to provide preventive protection to consumers through several regulations, namely Bank Indonesia Regulation Number 19/12/PBI/2017 concerning the Implementation of Financial Technology that regulates the procedures for implementing fintech in Indonesia and also the OJK Regulation Number 77/POJK.01/2016 on Information Technology-Based Lending and Borrowing Services that ...
The Existence of Collateral in Credit Through Peer-To-Peer Lending Services
Yustisia Jurnal Hukum, 2020
Recently, the total number of registered P2P Lending Fintech promoters has reached 144 companies after 17 fintech joined in one month and had a business license in October 2019. The status of business lisence conferred to platforms registered in OJK has met a number of requirements such as information security in the form of ISO 271001, digital signature and the principle of risk management. As an “umbrella organizationn” for all fintech companies in Indonesia, Indonesia Fintech Association (i.e., AFTECH) has 280 members, which 250 of them operate their business in digital financing system, online credit, innovation on digital finance, insuretech, equity crowdfunding, and etc. The rapid growth of the fintech industry may definitely make a huge contribution to the Indonesian people, especially for retail and unbanked segments. However, this rapid growth potentially evokes legal problems on its implementation as the implementation of credit on peer-to-peer lending does not bring the e...
Pandecta: Research Law Journal, 2021
A BSTRACT The presence of Peer to Peer Lending Based on Financial Technology (Fintech) in Indonesia is a real manifestation of a technological advancement. The advantage of technology is its simplicity, but like two sides of a coin, technological advances in financial services also cause polemics and problems. Based on complaints received by the Financial Services Authority, there are 2 things that are often complained about by borrower, it is regarding the unwise use of private data that is used as a way of collecting debt by peer to peer providers and the way they contact borrower for collecting debt. Even though it is considered controversial, the growth of fintech service providers has accelerated to 200%. These are show the urgency that the Financial Services Authority Regulation No.77/POJK.01/2016 requires revision because it is not in suitable with the current development of Fintech. The Financial Services Authority Regulation No.77/ POJK.01/2016 requires revisions regarding ...
The Legal Protection for Customers Using Online Loan Services
Jurnal Daulat Hukum
Currently, financial technology (fintech) is developing rapidly in Indonesia. The number of available fintech operating companies is increasing. The role of the Financial Services Authority is very important in supervising fintech-based companies in Indonesia in accordance with their authority in the field of financial services in general. The functions and authorities of the Financial Services Authority (in Bahasa “OJK”) are contained in Articles 4 and 5 of the Financial Services Authority Law with the aim of protecting consumers from all activities in the financial sector. This is also stated in Act No. 8 of 1999 concerning Consumer Protection (Consumer Protection Law) specifically in the field of Financial Services Products. Other rules regarding fintech supervision are contained in the Financial Services Authority Regulation Number 77/POJK. 01/2016 concerning Information Technology-Based Lending and Borrowing Services. The problem discussed is how is legal protection for custome...