The Rising Popularity of Online Lending in Indonesia: The New Opportunities for Banks (Push-Pull Mooring Perspective)

Background and Purpose: Fintech lending, also known as online lending, has experienced fast growth in Indonesia in recent years through digital platforms. Online lending is supplanting the financial intermediation function hitherto predominantly held by banks. This study examines the factors influencing Indonesians' inclination to transition from traditional banking services to online lending. It seeks to understand the appeal of online lending, which has enabled it to supplant Indonesian banks in financial intermediation, employing the Push-Pull Mooring theory. Methodology: This study used a nonprobability sampling technique to choose 200 respondents who are consumers of banking services and have transitioned to online lending. Data was gathered through Google Forms and subsequently analyzed utilizing SEM-PLS 4.0. Findings: The findings indicate that pull variables exert the most significant impact on the inclination to transition to online lending, with push variables following closely behind. The variable "switching barrier" does not influence the intention to switch to online lending. However, switching costs and low financial literacy significantly impact the switching barrier. Additionally, the moderation effect does not enhance the relationship between dissatisfaction with banking and the appeal of online lending. Online lending has attracted users by providing a value proposition that includes easy digital onboarding, quick loan processing and payout, and unsecured credit options for unbanked customers. The influence of brand loyalty on customer choices when selecting an online lender is minimal. Contributions: This study aims to enhance marketing theory and consumer behavior understanding by investigating the factors influencing Indonesians' intention to transition from traditional banking services to online lending, specifically focusing on Push-Pull and Mooring factors.