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