Peer-to-peer (P2P) online lending has the potential to boost innovation and financial inclusion in emerging markets, yet it can also incur investment and borrower-related risks, such as privacy breaches.

Driven by regulation control in China, Chinese investments flocked to Indonesia, causing a rapid expansion of online lending platforms.

Similar to what happened in China prior to the regulatory crackdown, the P2P lending boom in Indonesia saw a rise in unethical and illegal business practices. The government responded by creating new regulations and institutions to mitigate risks without stifling the potential for financial inclusion.

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.

Publication Date

Summer 2022

Report Number

HKUST IEMS Thought Leadership Brief No. 67

Notes/Citation Information