Effect of Borrower Reputation on Amount of Funding and Loan Interest Received on Peer to Peer (P2P) Lending in Indonesia

El Frida Fairuz Tsani

Abstract


The development of financial technology in Indonesia has been very rapid lately, leading to the growth of people's awareness and interest in the  world  of  finance  and  investment.  The  presence  of  Peer-to-peer (P2P) Lending is beneficial for the public to borrow and invest. In Indonesia, since February 2020, there have been 161 P2P Lending registered,   and   25   have   permits.   This   study   was   conducted   to determine the effect of borrowers' reputation on the amount of funding and loan interest earned on P2P Lending. Based on data collected from Investree  with  a  total  of  273  loans  sample  using  the  purposive sampling method, the results indicate that borrowers on P2P Lending with a good reputation will attract investors to provide funds so that borrowers  will get a high  amount of funding. Borrowers  with good reputations will also get low loan interest through the mechanism carried out by the platform.


Keywords


good reputation; amount of funding; loan interest

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