Thriving in Turbulent Times: The Dynamic Link Between Economic Condition and FinTech Business Lending Success

Authors

Nur ‘Asyiqin Ramdhan, Faculty of Business and Management Universiti Teknologi MARA- Cawangan Puncak Alam, Selangor, MalaysiaFollow
Imbarine Bujang, Faculty of Business and Management Universiti Teknologi MARA- Cawangan Sabah, MalaysiaFollow
Amirul Afif Muhamat, Faculty of Business and Management Universiti Teknologi MARA- Cawangan Puncak Alam, Selangor, MalaysiaFollow
Ninuk Dewi Kesumaningrum, Faculty of Economics and Business, Universitas Lampung, IndonesiaFollow

Abstract

This study aimed to understand how FinTech business lending was affected by the pandemic crisis, which caused small businesses to struggle with limited access to funds. During this crisis, demand for alternative financing, like peer-to-peer (P2P) lending, surged. However, P2P lending faces challenges related to information imbalances, especially during crises, when transparency and economic conditions impact investor decisions in Malaysia. We examined factors like platform interest rates, loan duration, investment size, bank lending rates (BLR), inflation, and the crisis using ARDL analysis. Our long-term analysis revealed a significant positive relationship between investment size and P2P lending, while economic conditions had no significant impact. In the short term, loan tenure played a vital role in determining loan success, and the crisis influenced investor decision-making. These findings suggest that Malaysian P2P lending platforms remained resilient and sustainable, even during unfavorable economic conditions. This resilience underscores the potential of P2P lending to provide a reliable source of financing for businesses, especially in challenging times.

Publication Date

2024

Received Date

23-Oct-2023

Revised Date

2-Jan-2024

Accepted Date

28-Feb-2024

Recommended Citation

Ramdhan, Nur ‘Asyiqin; Bujang, Imbarine; Muhamat, Amirul Afif; and Kesumaningrum, Ninuk Dewi (2024) "Thriving in Turbulent Times: The Dynamic Link Between Economic Condition and FinTech Business Lending Success," ASEAN Journal on Science and Technology for Development: Vol. 41: No. 1, Article 16.
DOI: https://doi.org/10.61931/2224-9028.1575
Available at: https://ajstd.ubd.edu.bn/journal/vol41/iss1/16