Peer-to-peer (P2P) lending has the potential to boost financial inclusion in emerging markets. This paper contributes to the literature on fintech governance in emerging Asian markets. It examines the case of the Indonesian government’s approach in regulating the P2P lending sector using both primary interviews and secondary firm-level data. Driven by regulation tightening in China and regulatory gaps in Indonesia, Chinese investments became the largest in this sector contributing, however, to growing risks from illegal business practices. The Indonesian government responded by creating new regulations and institutions, mitigating risks without stifling the potential for financial inclusion. We conclude a proactive approach towards monitoring and regulating emerging high-tech industries should be sought by strengthening links with industry and civil society, and through international cooperation for policy and knowledge sharing.
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This research project was partially funded by the Strategic Public Policy Research Funding Scheme from the Central Policy Unit of the Hong Kong Special Administrative Region Government, China (Project Number: S2016.A7.003).
The qualitative datasets generated during and analysed during the current study are not publicly available due to the confidentiality and anonymity of interviews but are available from the corresponding author on reasonable request.
The quantitative datasets generated during and analysed during the current study are available from the corresponding author on reasonable request.
Tritto, Angela; He, Yujia; and Junaedi, Victoria Amanda, "Governing the Gold Rush into Emerging Markets: A Case Study of Indonesia’s Regulatory Responses to the Expansion of Chinese-Backed Online P2P Lending" (2020). Patterson School of Diplomacy and International Commerce Faculty Publications. 1.