The future of P2P lending amidst crisis

In light of the recent crisis in the P2P lending sector, Y&S COO Jeffrey Bahar shared his insights with financial news portal, DealStreetAsia, on how experienced lenders are better equipped to assess risks and find solutions, while new lenders need guidelines for safe investing. 

The Indonesian peer-to-peer lending sector has been hit hard, affecting major lenders like InvestTree, TaniFund, and iGrow. This crisis is likely to deter retail lenders and investors, leaving only institutional lenders to operate in the country’s vast P2P lending landscape. The crisis, involving billions of rupiah, threatens to undermine market confidence among retail investors, who have limited capital, deployment ability. If retail lenders exit, the P2P lending industry could resemble multifinance, where financial institutions disburse funds directly to customers.

Quoted in DealStreetAsia recently, Y&S Chief Operating Officer Jeffrey Bahar pointed out that in the absence of regulations to protect retail investors, experienced lenders tend to choose platforms with low interest rates but high-risk management. They can quickly withdraw and shift investments to more reliable platforms when trouble arises. In contrast, new lenders are often attracted to platforms promising high yields and it is this group that needs guidelines on safe investing.

Jeffrey emphasized that P2P platforms should share their credit scores to help lenders make informed investment decisions, thereby contributing to a more secure P2P lending environment.

While the recent P2P lending issues may not impact the overall performance of the industry, they have caused a noticeable shift away from P2P lending. The main challenge will be scaling the P2P concept, which involves gathering small amounts of capital from numerous individuals. This trend towards institutional lending on these platforms is observed globally.

Click here  to read the full article in DealStreetAsia, it requires user subscription. The article is also carried on Nikkei Asia.

For media enquiries, please contact:

Marie Teo
Manager, Group Marketing Communications
YAMADA Consulting & Spire
Phone: +65 6221 7727
E-mail: [email protected] 

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