Factors Influencing P2P Lending Adoption

P2P lending is growing in Indonesia’s fintech industries. The fintech peer-to-peer lending operating system offers convenience for its users through web-based platforms and smartphone applications. But besides its benefits, many users cannot pay their bills due to poor financial literacy, which then leads to an increase in bad loans. The model used in this research was suggested to analyze the significant factors that influence P2P lending adoption. Respondents came from 424 Indonesian P2P lending users, the data gathered was processed using a structural equation model (SEM) to evaluate the hypotheses and validated using PLS-SEM. P2P lending adoption is primarily motivated by quality administrative service, data security, digital marketing, trust, and social influence. Financial risk, financial literacy, and perceived risk are not significant factors. Ease of use brings a negative impact to P2P lending adoption. The research provides insight into the variables influencing P2P lending adoption in Indonesia, as well as suggestions for both P2P lending companies and P2P lending users to avoid payment failures by raising awareness of the importance of financial literacy and risk management.