Determinants of Successful Lending Decision for Ultra-Micro Segment in P2P Lending Platform

A new alternative form of loan services, known as Peer-to-Peer Lending (P2P lending), is growing rapidly in Indonesia. The purpose of this research is to analyze all factors that influence lending decision for ultra-micro segment on P2P platform in Indonesia. As a quantitative research, primary data were collected through questionnaire. Validity and reliability test were measured using Confirmatory Factors Analysis (CFA) and logistic regression. The independent variables, which consisted of transaction cost, safety protection, information quality, social capital, loanable fund, service quality, repayment period, and interest rate, were analyzed to know their influences towards lending decision in a P2P lending platform. The result of the research showed that transaction cost, safety protection, and interest rate had significant and positive effect. Loanable funds had a negative effect while service quality, information quality, social capital, and repayment period had no effect towards lenders lending decision in P2P lending platforms in Indonesia. Keywords—Lending Decision, Ultra-Micro Segments, Peer-to-Peer Lending Platform