Proceedings of the International Colloquium on Business and Economics (ICBE 2022)

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How Does P2P Lending Lead to BI-Rate and Commercial Bank Income? Empirical Evidence from Indonesia

Authors
Hadi Ismanto1, 2, *, Atmaji1
1Sebelas Maret University, Surakarta, Indonesia
2Universitas Islam Nahdlatul Ulama (UNISNU Jepara), Jepara, Indonesia
*Corresponding author. Email: hadifeb@unisnu.ac.id
Corresponding Author
Hadi Ismanto
Available Online 26 December 2022.
DOI
10.2991/978-94-6463-066-4_12How to use a DOI?
Keywords
P2P lending; interest rate; interest income; non-interest income
Abstract

Technological developments have shifted the traditional financial system to digitalization by bringing joy and convenience to some parties. P2P lending comes with that excitement to debtors who do not qualify for bank lending. For this reason, this study aims to analyze the relationship of P2P lending companies to interest rates and income of commercial banks in Indonesia. Using monthly data from January 2017 to April 2022, we analyze this association with the VAR-VECM model. Through various diagnostic model tests, the regression results show that in general P2P lending companies affect interest rates, interest income, and non-interest income of commercial banks. The existence of P2P lending companies currently has a positive effect on interest rates next year. At the same time, P2P lending companies boost bank interest and non-interest income. They significantly hold down the interest and non-interest income of banks. The results record a two-way causal relationship between P2P lending companies and interest rates. The causality of P2P lending companies to non-interest income is also found, but not vice versa. This paper implies several leaps to maintain and control P2P lending risks that could potentially affect the macroeconomic and bank’s financial conditions. A healthy business climate can be created when risk monitoring of P2P lending and banking can go hand in hand.

Copyright
© 2022 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the International Colloquium on Business and Economics (ICBE 2022)
Series
Advances in Economics, Business and Management Research
Publication Date
26 December 2022
ISBN
10.2991/978-94-6463-066-4_12
ISSN
2352-5428
DOI
10.2991/978-94-6463-066-4_12How to use a DOI?
Copyright
© 2022 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Hadi Ismanto
AU  - Atmaji
PY  - 2022
DA  - 2022/12/26
TI  - How Does P2P Lending Lead to BI-Rate and Commercial Bank Income? Empirical Evidence from Indonesia
BT  - Proceedings of the International Colloquium on Business and Economics (ICBE 2022)
PB  - Atlantis Press
SP  - 114
EP  - 139
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6463-066-4_12
DO  - 10.2991/978-94-6463-066-4_12
ID  - Ismanto2022
ER  -