WHY ARE YOUTH INTENT ON INVESTING THROUGH PEER TO PEER LENDING? EVIDENCE FROM INDONESIA

  • Ichwan Ichwan
  • Rachmatina Kasri
Keywords: Financial Technology, Peer to Peer Lending, P2P, Techonology Acceptance Model, TAM

Abstract

This study aims to analyse the factors that influence the intention of youths/millennials in Jakarta, the capital of Indonesia, to invest in Peer to Peer (P2P) lending. Due to the relative newness of P2P lending in Indonesia, the framework utilised is the Technology Acceptance Model (TAM), and the study involves around 400 youths, the majority of whom are Muslims. Further, the study employs Structural Equation Modelling (SEM) and logistic regression to analyse the influence of socio-demographic variables (gender, religion, marital status, education, employment, religion and income) on the intention to invest through P2P lending. The results of the study indicate that intention to invest in P2P lending is positively correlated and influenced by the attitude variable, which is itself influenced by factors including perceived ease of use, knowledge and trust in P2P lending. The results imply that the potential of youth to invest in P2P lending might be enhanced by improving technology (ease of use), literacy and trust in P2P lending. Moreover, it is suggested that those most interested in and more likely to invest through P2P lending are Muslims, have higher education and have higher incomes. With better literacy and marketing programmes, these groups could be targeted by P2P lending platforms to become potential investors. Lastly, the findings are expected to contribute to Islamic finance concepts and practices, particularly in the context of Indonesia.

References

Alam, S. S., Janor, H., Zanariah, C. A. C. W., & Ahsan, M. N. (2012). Is religiosity an important factor in influencing the intention to undertake Islamic home financing in Klang Valley. World Applied Sciences Journal, 19(7), 1030-1041.
AlKailani, M. (2016). Factors affecting the adoption of internet banking in Jordan: An extended TAM model. Journal of Marketing Development & Competitiveness, 10(1).
APJII (2017). Infografis Penetrasi dan Perilaku Pengguna Internet Indonesia 2017. APJII.
Badan Pusat Statistik Indonesia (2018). Produk Domestik Regional Bruto Provinsi-Provinsi di Indonesia Menurut Lapangan Usaha. Jakarta: Badan Pusat Statistik.
Banan, M. R. (2010). E-banking and managerial challenges. Computer Science & Telecommunications, 24(1).
Bank Indonesia (2015). Laporan Perekonomian Indonesia 2014. Jakarta: Bank Indonesia.
Bank Indonesia (2017). Peraturan Bank Indonesia Nomor 19/12/PBI.2017. Tentang Penyelenggaraan Teknologi Finansial.
Bashir, I., & Madhavaiah, C. (2015). Consumer attitude and behavioural intention towards Internet banking adoption in India. Journal of Indian Business Research, 7(1), 67-102.
Bayyurt, N., Karışık, V., & Coşkun, A. (2013). Gender differences in investment preferences. European Journal of Economic & Political Studies, 6(1).
Bhavani, G., & Shetty, K. (2017). Impact of demographics and perceptions of investor on investment avenues. Accounting and Finance Research, 6(2).
Chang, C. C., & Chang, P. C. (2013). A study on Taiwan consumers’ adoption of online financial services. Asia Pacific Management Review, 197-219.
Chen, D., Lou, H., & Van Slyke, C. (2015). Toward an understanding of online lending intentions: Evidence from a survey in China. CAIS, 36, 17.
Chuttur, M. (2009). Overview of Technology Acceptance Model: Origins, developments, and future direction. Working Paper on Information Systems.
Damayanti, D. (2019). Prospek Pengembangan Ekonomi dan keuangan Syariah Nasional. Makalah disampaikan pada Sharia Talk ILUNI FEB UI, 8 Agustus 2019.
Ernst and Young (2019). Global FinTech Adoption Index 2019. Ernst and Young.
Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2014). Multivariate data
analysis. Exploratory data analysis in business and economics (Seventh edition). Edinburgh: Pearson Education Limited.
Havrylchyk, O., & Verdier, M. (2018). The financial intermediation role of the P2P lending platforms. Comparative Economic Study, 115-130.
Hooper, D., Coughlan, J., & Mullen, M. (2008). Structural equation modelling: Guidelines for determining model fit. The Electronic Journal of Business Research Methods, 6(1), 53-60. Iman, N. (2018). Assessing the dynamics of fintech in Indonesia. Investment Management and Financial Innovations, 15(4), 296-303.
Islam, Z., Kim Cheng Low, P., & Hasan, I. (2013). Intention to use advanced mobile phone services (AMPS). Management Decision, 51(4), 824-838.
Islamoğlu, M., Apan, M., & Ayvalı, A. (2015). Determination of factors affecting individual investor behaviours: A study on bankers. International Journal of Economics and Financial Issues, 5(2), 531-543.
Jamaludin, N. (2013). Religion and individual investment choice decision: The Case of Malaysia. International Journal of Business and Social Science, 4(1).
Kasri, R. A. (2016). Effectiveness of zakah targeting in alleviating poverty in Indonesia. Al-Iqtishad: Journal of Islamic Economics, 8(2), 169-186.
Katadata.co.id. (2017). https://databoks.katadata.co.id/datapublish/2017/10/11/penetrasi-Layanan-perbankan-indonesia -tertinggal-darimalaysia
Katadata.co.id. (2018). https://databoks.katadata.co.id/datapublish/2018/02/23/usia-produktif-mendominasi-pengguna -internet.
Katadata.co.id. (2018). https://katadata.co.id/infografik/2018/03/08/skema-pinjaman-melalui-fintech-semakin-diminati.
Kontan.co.id. (2018). http://keuangan.kontan.co.id/news/tekfin-peer-to-peer-lending-telah-menyalurkan-pembiayaan-rp -25-triliun-tahun-lalu.
Lin, C. (2006). A study on the organizational innovations in Taiwan’s logistics industry. The Business Review, Cambridge, 5(1), 270.
Lu, H.-P., & Su, P. (2009). Factors affecting purchase intention on mobile shopping websites. Internet Research, 19(4), 442-458.
Malmarugan, D. (2008). Strategic model for predicting customer’s intention to purchase apparel online. Innovative Marketing, 4(1).
Montazemi, A. R., & Qahri-Saremi, H. (2015). Factors affecting adoption of online banking: A meta-analytic structural equation modeling study. Information & Management, 52(2), 210-226.
Napitupulu, S. K., Rubini, A. F., Khasanah, K., & Rachmawati, A. D. (2017). Perlindungan Konsumen Pada Fintech. Jakarta: Departemen Perlindungan Konsumen .
OJK (2019). Perkembangan Fintek Lending Periode Agustus 2019. https://www.ojk.go.id/id/kanal/iknb/data-dan-statistik/fintech/Pages/Statistik-Fintech-Lending-Periode-Agustus-2019.aspx.
OJK.go.id. (2018). https://sikapiuangmu.ojk.go.id/FrontEnd/CMS/Category/63
Olekar, R. O., & M, V. (2016). Gender difference in investment behavior - a case study. Acme Intellects International Journal of Research in Management, Social Sciences & Technology.
Otoritas Jasa Keuangan (2016). POJK No. 77 Tahun 2016. Tentang Layanan Pinjam Meminjam Uang Berbasis Teknologi.
Pikkarainen, T., Pikkarainen, K., Karjaluoto, H., & Pahnila, S. (2004). Consumer acceptance of online banking: An extension of the Technology Acceptance Model. Internet Research, 14(3), 224-235.
PWC (2015). States of Guernsey. PWC.
Republik Indonesia (2003). Undang-Undang Republik Indonesia Nomor 20 Tahun 2003. Tentang Sistem Pendidikan Nasional.
Riffai, M. M. M. A., Grant, K., & Edgar, D. (2012). Big TAM in Oman: Exploring the promise of on-line banking, its adoption by customers and the challenges of banking in Oman. International Journal of Information Management, 32(3), 239-250.
Salciuviene, L., Auruskeviciene, V., & Ivanauskiene, N. (2014). Key drivers affecting customer intention to purchase financial services online. Engineering Economics, 25(2), 194-202.
Shafi, M. (2014). Determinants influencing individual investor behavior in stock market: A cross country research survey. Nigerian Chapter of Arabian Journal of Business and Management Review, 62(1100), 1-12.
Śledzik, K. (2013). Schumpeter’s view on innovation and entrepreneurship. S. Hittmar (Ed.), Management Trends in Theory and Practice. Faculty of Management Science and Informatics, University of Zilina & Institute of Management by University of Zilina.
Sudarsono, M. C. S. R. (2015). Using theory of planned behavior in predicting intention to invest: Case of Indonesia. International Academic Research Journal of Business and Technology, 1(2), 137-141.
Sugiyono (2017). Metode Penelitian Kuantitatif, Kualitatif, dan R&D. Bandung: Alfabeta.
Venkatesh, V., & Davis, F. D. (1996). A model of the antecedents of perceived ease of use: Development and test. Decision Sciences, 27(3), 451-481.
Venkatesh, V., & Davis, F. D. (2000). A theoretical extension of the technology acceptance model: Four longitudinal field studies. Management Science, 46(2), 186-204.
Wang, H., Chen, K., Zhu, W., & Song, Z. (2015). A process model on P2P lending. Financial Innovation, 1(1), 3.
Wang, P., Zheng, H., Chen, D., & Ding, L. (2015). Exploring the critical factors influencing online lending intentions. Financial Innovation, 1(1), 8.
Zhang, T., Tang, M., Lu, Y., & Dong, D. (2014). Trust building in online peer-to-peer lending. Journal of Global Information Technology Management, 17(4), 250-266.
Published
2019-12-27
How to Cite
Ichwan, I., & Kasri, R. (2019). WHY ARE YOUTH INTENT ON INVESTING THROUGH PEER TO PEER LENDING? EVIDENCE FROM INDONESIA. Journal of Islamic Monetary Economics and Finance, 5(4), 741-762. https://doi.org/10.21098/jimf.v5i4.1157
Section
Articles