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ABSTRACT
An alternative for Micro Small and Medium-Sized Enterprises (MSMEs) against the barriers of financial inclusion is peer-to-peer (P2P) lending services. Despite its effectiveness in advancing financial inclusion, the factors that influence its adoption among MSMEs are unique. The purpose of this study is to analyze the factors influencing the intention of Indonesia MSMEs to adopt P2P lending services using the unified theory of acceptance and use of technology (UTAUT) 2 model. The results of this study show that five variables significantly affect MSMEs including performance expectancy, social influence, price value hedonic motivation, and effort expectancy. Meanwhile, the result shows that the factors of facilitating conditions and habits were not significant. This study contributes a reflective insight on the determinants of the P2P lending adoption among MSMEs in a developing country.
Keywords: Financial inclusion, financial technology, peer-to-peer, MSMEs, UTAUT2, structural equation modeling.
1. INTRODUCTION
Micro, small and medium enterprises (MSMEs) play a significant role in developing countries since their majority and success against the unemployment issue (Organisation for Economic Cooperation and Development, 2018). According to data Kementerian Koperasi Koperasi dan Usaha Kecil dan Menengah Republik Indonesia (2018), all business sectors consist of 99.99% MSMEs which have provided about 97% of employment and contributed about 60% of gross domestic product in Indonesia. The economic indicators of Indonesia had been supported by MSMEs, and thus their performances should be on researchers concern (Williams et al., 2018).
Several issues regarding marketing, financial inclusion, and advanced technology intimidated the MSMEs growth. At the moment, MSMEs have relied on digital technology through social media and marketplaces to supports their marketing and other business processes. The advantages of digital technology for marketing especially in the pandemic movement control have transformed numbers of MSMEs to digitalization. Fatma et al. (2021) found social media as digital-based marketing effectively sustains Indonesian MSMEs during the policy by Government.
Regarding the issue of financial inclusion, it can be facilitated by a kind of financial technology like peer-to-peer lending (P2P). Bank Indonesia (2019) found a low disbursement of credit facility for MSMEs, which was less than 20% of total bank credit. Instead, the providers have overcome the intricate financial access of MSMEs in banks which require high eligibility through the digitally-enabled services (Yunus, 2019). The technology...